As of July 25th, the current domestic operating rate of BDO is around 67.82%, with a full month operating rate of around 65%. Most downstream terminal areas are in the off-season in July, with small orders for just needed purchases being the main focus, and the overall market is in a tight and balanced supply state.
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From the current information, there is a decrease in supply in August. On the demand side, July August is the traditional off-season, while September is the traditional peak season. Downstream demand for BDO is increasing month by month. Based on the current actual supply and demand, it cannot be ruled out that there will be a “mismatch” between supply and demand in the third quarter of BDO. Specifically:
On the supply side, based on the comprehensive calculation of existing maintenance and restart messages, the BDO operation in August was around 54%. If there are new maintenance and unexpected shutdowns, the operation rate will be lower. From this perspective, the BDO supply in August significantly decreased compared to July.
On the demand side, August gradually enters the peak demand season, and the traditional peak season demand base in September is greater than the overall demand in the off-season. Among them, the main downstream PTMEG has maintained tight supply since July, and the seasonal demand for its main downstream spandex from August to September only increases and does not decrease for PTMEG. Another major downstream PBT is that the demand for spinning in the peak season will be higher than that in the off-season, while the demand for GBL, degradable materials, PU, TPU, and other fields will maintain and have the potential for slight growth.
Overall, it is expected that BDO in the third quarter, especially from August to September, will gradually decrease in market supply and inventory, and demand will inevitably increase under the peak season effect, with a high probability of tight market supply.
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