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Forecast and analysis on the market status and development trend of China’s BDO industry in 2023


China Business Information Network News: BDO, as an important basic raw material for fine chemicals, is widely used in textile, chemical and other fields, among which PTMEG and PBT engineering plastics are the traditional application fields of BDO. Under the background of “carbon peak” and “carbon neutralization”, in order to reduce carbon emissions, emerging fields in the chemical industry, such as biodegradable materials, new energy vehicles, thermoplastic elastomers, are expected to lead the new development of low-carbon chemical industry. As an important basic chemical raw material for biodegradable materials, new energy vehicles, thermoplastic elastomers and other industries, BDO will usher in new growth points of the industry.


Operating rate analysis


BDO is widely used as the synthetic raw material of PBS series biodegradable materials, and is an important organic chemical product to realize the environmental protection substitution of plastics. From the end of 2020 to 2021, driven by the substantial growth in the demand for downstream textiles, new energy vehicles, PBT and degradable materials, the BDO sales price has rapidly increased, thus driving the operating rate of the BDO industry to significantly increase. The BDO operation rate in China will reach 72% in 2021, and it is estimated that the BDO operation rate will reach 77% in 2023.


Future development trend


1. The capacity layout is further concentrated in the west


At present, domestic BDO is mainly concentrated in northwest resource rich areas (Xinjiang, Shaanxi, Inner Mongolia). At present, the production process of BDO in China is dominated by the alkyne aldehyde process. The main raw materials of the alkyne aldehyde process are coal and calcium carbide. The western region of China is rich in oil, natural gas and coal resources, and calcium carbide production capacity is mainly concentrated in the central and western regions, which is not suitable for long-distance transportation. Considering the factors of mining and transportation costs, the acetylene aldehyde production units in China are mainly located in the western region. Overall, China’s BDO production capacity shows a trend of further concentration in the west.


2. Supply falls short of demand in the short term, and the long-term contradiction between supply and demand will gradually ease


Due to the impact of the epidemic, some foreign enterprises producing BDO stopped production, and the demand for BDO downstream industry chain in China was strong, which led to the shortage of BDO products in the short term. Its price also began to rise rapidly in the second half of 2020, and the profitability of enterprises in the industry increased significantly. Influenced by the above favorable factors, some domestic chemical enterprises have planned to build new BDO projects. The great demand for BDO from traditional and emerging fields has led to the tight supply of BDO and the high price. In the long run, with the production of new capacity, the capacity and demand of BDO will show a trend of simultaneous rapid growth, and the contradiction between supply and demand is expected to ease.


3. Coal production process still has cost advantage


At present, BDO production processes include alkyne aldehyde method, maleic anhydride method, butadiene acetyloxylation method and propylene oxide method. Due to different raw materials and technical means of different methods, the costs of different processes are different. Among them, the cost of coal to acetaldehyde BDO is the lowest, which is the mainstream production process in the market. Benefiting from resource reserves and the price advantage of basic raw materials, Xinjiang has the lowest cost of coal to acetaldehyde BDO. In the future, with the strengthening of carbon emission control, the cost of coal based BDO may rise. However, the Central Economic Work Conference in 2021 proposed that energy consumption of raw materials will not be included in the total energy consumption control. For enterprises using fossil fuels as raw materials, the pressure on carbon emissions is expected to be reduced to a certain extent. In the medium and long term, the coal based BDO production process still has cost advantages.

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