Price and market trends: Asia BDO may extend gains on restocking ahead of Lunar New Year

25 January 2013 10:36  [Source: ICB]

Asia's butanediol (BDO) prices may increase further in the coming weeks on the back of limited supply, rising feedstock costs and restocking activities by end-users, ahead of the week-long Lunar New Year holiday in the key China market, industry sources say.

On 15 January, bulk BDO prices were assessed at $1,900-1,950/tonne (€1,426-1,464/tonne) CFR (cost and freight) CMP (China Main Port), up by $50/tonne from the previous week, according to ICIS.

The gains made so far this year were largely on account of limited supply, as BDO plants have been running at reduced rates. In China, major BDO plants have been running at 50-60% of capacity as demand has remained sluggish, market sources said.

At the start of the year, prices increased as buying momentum picked up ahead of China's week-long Lunar New Year on 9-15 February.

"We are trying to build some stocks amid the uncertain outlook and the current prices are reasonable for us," an end-user in south China said.

Meanwhile, rising feedstocks including butadiene (BD) and propylene oxide (PO) are also lending some support to BDO prices.

On 11 January, BD prices in Asia were at $1,720-1,760/tonne CFR NE (northeast) Asia, up by $90/tonne from the previous week, while PO was assessed at $1,530-1,600/tonne CFR China, up by $60/tonne over the same period, according to ICIS.

Meanwhile, BDO consumption from downstream industries such as rigid polyurethane (PU), polybutylene terephthalate (PBT) and polytetramethylene ether glycol (PTMEG) is still generally weak.

The majority of market participants expect demand to improve only after the Lunar New Year holiday. "I hope demand in 2013 will be better than last year," a trader said.

By: Judith Wang
+65 6780 4359

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