The US 1,4-Butanediol (BDO) market is experiencing a great deal of downward pressure because of continued oversupply; weak global fundamentals and sagging downstream consumption consequently. While domestic production levels are steady; and Gulf Coast cracker and feedstock system operations maintain a steady state of efficiency and functionality; US BDO is under intense price competition from lower cost international producers. Converters have backed off from restocking due to fears of an impending holiday slowdown, which has resulted in an additional decline in demand, as well as driving sellers into a highly competitive buyer driven market. Several analysts have observed that this is reflective of the increasing stress on the wider petrochemical sector due to growing global overcapacity as well as restructuring pressures. DS Segments (PBT, THF, PTMEG, and spandex) also report limited activity; further weighing on BDO fundamentals. Thus, in the absence of any rebound in these segments of the market, the US BDO market is likely to remain highly volatile and with very limited near-term recovery.
