SINGAPORE (ICIS)--Asia's butanediol (BDO) market remained on an uptrend with demand from the downstream sectors showing continued pick-up post-Chinese holidays.
Firm demand is expected to persist until the end of the year, although participants continued to keep an eye on the US elections, with many adopting a cautiously optimistic stance on the market.
Average domestic prices in China rose above yuan (CNY) 9,000/tonne DEL as of 20 October, up from CNY7,550/tonne DEL in the first half of the third quarter, ICIS data showed.
Import prices were also firmer as of 20 October at above $1,200/tonne CFR (cost & freight) China, with suppliers’ November selling indications at $1,300/tonne CFR China and above.
“Demand improvement remains decent after the Chinese holidays,” said a producer in northeast Asia.
BDO is a chemical intermediate used in the production of polymers, solvents and fine chemicals.
Supply in Asia has tightened with a plant undergoing maintenance, while another facility has remained shut due to an outage in its upstream unit in September.
Force majeure at US and European plants further added to the supply woes.
Meanwhile, some producers in the US and Asia permanently exiting the market by end of this year further fueled concerns that supply would remain constrained.
“Demand seems more than supply at this moment,” said a separate supplier in northeast Asia, who anticipate further upswing in the market.
However, despite rising BDO values, margins have remained weak as feedstock costs have risen over the past two months.
Feedstock propylene oxide, butadiene and maleic anhydride have posted sharp gains in recent weeks, with BDO makers struggling to keep pace.
Focus article by Clive Ong
($1 = CNY6.67)
Photo: At the Port of Lianyungang in east China's Jiangsu Province - 07 September 2020. (Source: Xinhua/Shutterstock)
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