Butanediol Market Sentiment Improves in China

Shanghai, China: The Butanediol market in South China has varied over the last two weeks, with no production activity at first and then a dramatic increase in market activity. The buyers were said to be in a wait-and-see mindset, buying only what they needed. While, in Eastern China, the butanediol market consolidated at a lower level as manufacturing operations resumed and market buying emotions became remained sluggish due to reduced demand. The mainstream quotation, on the other hand, constant. Manufacturers reported small orders that needed to be filled in the recent week due to low demand.

Growing supply is weighing on Asia's petrochemical markets, with China shipping more goods as the yuan weakens and local demand suffers under lockdowns. The weakening of the yuan has resulted in the narrowing or closure of arbitrage windows for transporting cargo into China, while improving export prospects. Traders say that with a lower yuan, the trading route "out of China" may remain for a while. The Prices for 1,4 Butanediol Spot Ex-Qingdao were assessed at USD 4110/MT, whereas FOB-Qingdao values settled at USD 3625/MT in the week ending June 3rd as per the ChemAnalyst analysis .

The Asian butanediol (BDO) market continues to be weighed down by weak demand in the region. Economic headwinds from the Ukraine crisis and Russian sanctions, as well as the Chinese trade embargo, might keep buying momentum modest in the near term. China's crude consumption has slowed as industrial production has been hampered by pandemic-related restrictions that have been in place since February, with little hint that the government would abandon its zero-COVID goal.

Following a major return of COVID-19 infections, rigorous limitations on people travel and business activities have dramatically lowered domestic demand, putting negative pressure on Asian markets.

Butanediol prices in China have fallen in the last month. The primary cause of the price drop is a bearish mood market, in which demand for BDO has decreased and manufacturers are offering the product at a discount, as evidenced by lower spot market pricing. Despite the fact that the price decline has hurt manufacturers' profit margins, they still have a considerable profit margin of more than 50%. For the week ending April 22nd, FOB Qingdao pricing were set at USD 4300 per MT.

On the downstream side, PBAT prices have fallen in lockstep with BDO feedstock prices. PBAT prices declined in the recent week due to rising stocks and poor demand in China's domestic market. Demand from the United States has slowed.