BDO Market Urgently Seeks New Way Out

In recent years, the domestic BDO market bid farewell to prosperity and entered a downturn. Judging from the trend of market prices in recent years, spot prices of BDO appeared to fluctuate as early as 2012, and from 2013 to 2014, the price was about 13,500 yuan (tonnage) for about the next year. With the same) around the shock. However, in April 2014, the market fell again and the price fell to 8,700 yuan for three consecutive months. Since March of this year, due to high factory inventories and sufficient supply of goods, market prices have continued to fall over and historical lows have been refreshed again. According to the chemical online statistics, the price of BDO dropped from RMB 9850/ton in early March 2015 to RMB 8100/ton on May 5. The total decrease was 17.8%.

As an important organic and fine chemical raw material, 1,4-butanediol (BDO) is widely used in chemical, textile, automotive and pharmaceutical industries. In recent years, due to the abundant calcium carbide resources in China, and the increasing demand for BDO products, companies and investors have begun to build a large number of new devices for BDO of the Alkylated Alkaline Method. As these new devices are put into production, the problem of overcapacity in domestic production gradually emerges. As of the end of 2014, the annual production capacity of BDO production facilities in China was about 1.4 million tons, while the apparent consumption was only about 600,000 tons. According to incomplete statistics, 1.3 million tons of production capacity will still be put into production in 2015, which is close to double the current production capacity, and the overcapacity will be further exacerbated.

In terms of imports and exports, the current mainstream production of BDO uses more petroleum routes, namely the maleic anhydride method. The BDO products produced by this method have high quality, low moisture content, low investment, comply with environmental protection requirements, and can also produce tetrahydrofuran (THF) and γ. - Butyrolactone (***) is highly recognized in the international market. However, most of the BDO produced in China adopts the alkydaldehyde method. The quality of the product derived from this method is relatively poor, and its acceptance in foreign markets is relatively low. Despite the oversupply in the domestic market, the export volume is very small and almost negligible. The major export companies are Shanxi Three-dimensional Group and Xinjiang Meike Chemicals. It can be seen that it is very difficult for BDO produced in China to go abroad.

In addition, since December 25, 2014, China has imposed anti-dumping duties on imports of 1,4-butanediol originating in Saudi Arabia and Taiwan. This move undoubtedly worsens the BDO market. Foreign manufacturers who have been stunned to see a large number of BDO products will flood into China, and these sources of goods from overseas will impact the mainland market with more obvious advantages. The domestic BDO market competition will be even more fierce, and the market conditions may be difficult to improve.

To sum up, at present, China's BDO market carries many pressure loads, and it urgently needs to find new outlets. On the one hand, overcapacity is continuously squeezing the profit of the alkyne aldehyde production companies. On the other hand, the global BDO production process is mainly controlled by companies such as BASF in Germany, ISPs and Invista in the United States, Davy in the United Kingdom, Mitsubishi in Japan, and Dalian in Taiwan. In addition to Shanxi's three-dimensional chemical industry, most other manufacturers in China purchase production technology from abroad. The author suggests that Chinese companies should strive to innovate, increase and improve the existing process routes, and develop new downstream products and new processes in the BDO industry. At the same time, the government should control the construction of the alkylated aldehyde project, and publicize and support the new construction of the oil route maleic anhydride method to fill the gaps in China's BDO high-end market and improve the fierce competition in the low-end market.