ICIS publishes a Butanediol report for Asia, Europe and the US, though the Europe and US reports are combined as a global report.
Contract and spot price assessments are made by our locally based reporters, and market news and analysis, such as production, upstream/downstream activity and graphs, are all included when relevant. Our independent reports are an essential tool to help you make important commercial decisions.
Updated to Q4 2020
Supply in the region declined with plants in Europe and the US declaring force majeure, resulting in fewer parcels flowing east. Two plants in Asia announced permanent shutdowns, one by the end of 2020 and the other by the end of March 2021, further fuelling the perception of tight availability. Other plants in the region did not operate fully as feedstock costs have risen, squeezing margins.
Buying momentum improved in Q4 as downstream sectors continued to recover. Higher manufacturing output for textiles, automotives and finished products lifted consumption of downstream chemicals, which in turn boosted demand for BDO. The positive market momentum carried into the year end, with suppliers anticipating further pick up in 2021.
The supply of BDO tightened in Q4 due to a combination of domestic supply disruptions and limited imports. BASF experienced a force majeure which lasted from mid-October to late November following a technical incident ahead of planned maintenance at its facility. Rising prices in Asia greatly reduced the availability and competitiveness of imports.
Demand for BDO rose sharply in Q4 compared with the weak consumption seen for much of Q2 and Q3, due to the impact of the pandemic on the key automotive industry. Demand in October and November was healthy and sources described December demand as unseasonably strong, and at least 20% higher than for the same month in 2019.
Supply constraints helped support prices, with Q4 contracts assessed higher for the first time in two years. The H2 closure of Lycra’s Texas plant represented a 28% decrease in US BDO capacity, according to the ICIS Supply and Demand Database. In October, LyondellBasell declared force majeure on its BDO and derivatives as a result of a feedstock issue.
Demand continued to rebound in Q4. Durable goods in particular saw a strong improvement in the US, as consumers shifted spending away from travel and entertainment amid persistent pandemic-related lockdowns. The downstream automotive sector continued to improve, though construction maintained its position at the forefront of the economic recovery.
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1,4-Butanediol (BDO) is an intermediate product; a colourless and almost odourless viscous liquid.
Butanediol (BDO) is a colourless and almost odourless viscous liquid. This hygroscopic diol is soluble in water, alcohols, esters, ketones, glycol ethers and glycol ether acetates; immiscible in aliphatic and aromatic hydrocarbons and diethylether.
BDO is a chemical intermediate used in the production of polymers, solvents and fine chemicals.
The largest consumer is tetrahydrofuran (THF), used to make polytetramethylene ether glycol (PTMEG) which goes into spandex fibres, urethane elastomers and copolyester ethers. The next largest outlet is polybutylene terephthalate (PBT).
Sizeable quantities of BDO go into the manufacture of gamma-butyrolactone (GBL), which has outlets in electronics and high-performance polymers.
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