China’s BDO (1,4-butanediol) market is accelerating expansion, but there are still problems in industry development

BDO (1,4-butanediol) is a saturated carbon four-chain diol. It is a colorless oily liquid when the temperature is higher than the freezing point. It is a needle-like crystal when the temperature is lower than the freezing point. It is hygroscopic and can be mixed with water. Miscible, soluble in ethanol, slightly soluble in ether. BDO (1,4-butanediol) is mainly used in THF, GBL, PBT, PU, ​​PBS/PBAT and other fields, and is widely used in spices, inks, paints, disposable plastic utensils and other fields. In recent years, with the implementation of plastic restriction orders, BDO (1,4-butanediol), as an important raw material for the production of degradable plastics, has accelerated its market size and industry expansion.

From a market perspective, BDO (1,4-butanediol) is widely used in many types of engineering plastics and chemical fibers. With the development of downstream markets, China’s BDO (1,4-butanediol) market demand will grow trend, especially in the context of the “plastic restriction” policy becoming stricter and its implementation increasing, BDO (1,4-butanediol) is favored by the market as a degradable plastic monomer, prompting its market size to expand rapidly growth trend. From the perspective of industry development trends, China is currently the largest BDO (1,4-butanediol) producer in the world, with huge domestic production capacity. Attracted by the good market prospects, not only companies in the industry have expanded production capacity, but also the industry Foreign companies are also actively involved in BDO (1,4-butanediol) production and building BDO (1,4-butanediol) production capacity. Representative companies include Tongde Chemical, Wanhua Chemical, Xinjiang Meike, etc. According to the released “2022-2025 China BDO (1,4-butanediol) Industry Application Market Demand and Development Opportunities Research Report》shows that in 2021, China’s BDO (1,4-butanediol) industry production capacity will exceed 2 million tons. From the perspective of technological development, the development and application of low-cost, low-pollution industrial production technology is still an important direction for the development of the BDO (1,4-butanediol) industry, especially as the country increases supervision of energy conservation and emission reduction in the chemical industry. In the context of the BDO (1,4-butanediol) industry, reducing production costs and reducing environmental pollution is of great significance to the development of enterprises in the BDO (1,4-butanediol) industry. At the same time, Analysts believe that China’s BDO (1,4-butanediol) industry still has the following problems:

1. The supply of raw materials is restricted by policies

At present, most domestic BDO (1,4-butanediol) production equipment uses the calcium carbide acetylenic method. The production of calcium carbide, its important raw material, requires a large amount of electricity and is a high-energy-consuming industry. In the context of carbon neutrality, calcium carbide production capacity growth is restricted. The National Development and Reform Commission mentioned in the “Guidance Catalog for Industrial Structural Adjustment (2011, 2019 Edition)” and the “Strict Energy Efficiency Constraints in Key Petrochemical Chemical Industries to Promote Energy Conservation and Carbon Reduction Action Plan (2021-2025)” that the elimination of backward calcium carbide production capacity and the establishment of new calcium carbide projects Implement equivalent replacement of production capacity. With the implementation of the policy, the total calcium carbide production capacity has been declining for many years, while the proportion of effective production capacity has continued to increase, leaving little room for further equal replacement and construction of new production capacity. If the policy is strictly implemented, calcium carbide production may be significantly negatively affected, which will impact the BDO (1,4-butanediol) industry in terms of supply and price.

2. The focus of production is far away from the market

The northwest region has a vast territory, rich resources, cheaper land rent, energy and other aspects. In addition, the northwest region, represented by Xinjiang, Shaanxi and Inner Mongolia, has relatively good development of calcium carbide, methanol and other industries. It is BDO (1,4-butanediol). ) industry provides abundant raw materials, making the northwest region gradually become China’s BDO (1,4-butanediol) production center. Enterprises represented by Xinjiang Meike, Xinjiang Tianye, and Lanshan Tunhe occupy the national BDO (1,4-butanediol) production center. 1,4-butanediol) industry’s important capacity share. However, the country’s main BDO (1,4-butanediol) consumer markets are concentrated in economically developed regions such as North China, East China, and South China. The production center of gravity is far away from the market, which makes the transportation cost of the BDO (1,4-butanediol) industry relatively high and the delivery cycle long.

3. There is a disconnect between production capacity expansion and market demand

From 2011 to 2016, China’s BDO (1,4-butanediol) industry expanded too quickly, resulting in excessive production capacity in the BDO (1,4-butanediol) industry, low industry profits, and low operating rates. Since 2020, thanks to the implementation of plastic restriction policies, the demand for downstream degradable plastics such as PBAT has surged, and the production of BDO (1,4-butanediol) has been difficult to meet market demand, forcing downstream companies to lock in long-term contracts. BDO (1,4-butanediol) production capacity to ensure supply. Stimulated by strong market demand, China’s BDO (1,4-butanediol) industry has accelerated production capacity expansion. Xinjiang Meike, Tongde Chemical, Wanhua Chemical, Sanwei Chemical and other companies have launched new BDO (1,4-butanediol). Butanediol) project, and the planned production capacity is huge. However, most of these projects will be completed and put into production after the second half of 2022, and once production capacity is released, market saturation may rise rapidly.�This may lead to overcapacity and product prices may fall rapidly.