Tetrahydrofuran

THF (Tetrahydrofuran) Commodity Market Intelligence Report – Recent Dynamics

I. Price Trends
- **Latest Quotation**: As of July 5, 2026, the benchmark THF price stands at RMB 11,800/ton, up 3.74% from RMB 11,375/ton on June 16.
- **Recent Volatility**: Between June 7 and July 5, 2026, prices fluctuated within the range of RMB 8,400–11,875/ton. The RMB 9,000/ton level was repeatedly tested on June 28, July 1, and July 5. On July 5, the price reached RMB 11,875/ton—the highest in the past three months.
- **Regional Disparities**: Henan Province demonstrates superior price stability compared to the national average, attributable to expanded bio-based capacity and integrated industrial chain development. However, local quotations remain subject to fluctuations of RMB 100–200/ton due to volatility in BDO (1,4-butanediol) feedstock prices.

II. Supply-Demand Landscape
- **Supply Side**:
- **Capacity Expansion**: Over 90% of domestic THF is produced via BDO dehydration-cyclization; PBAT (polybutylene adipate-co-terephthalate) co-production routes contribute ~30% of circulating supply. In 2026, an additional 1.78 million tons/year of new PBAT capacity is expected to come online, boosting co-produced THF supply.
- **Bio-based Breakthrough**: China’s first non-grain bio-based THF plant—20,000 tons/year—commenced operations in 2026. It achieves a 70% reduction in carbon emissions versus petrochemical-based THF, with gradually emerging cost advantages; however, its current market share remains below 5%.
- **Demand Side**:
- **Commercial Market**: Apparent consumption in 2026 is projected at 94,600 tons, reflecting a CAGR of 2.31% from 2021 to 2026. Solvent applications account for 75% of demand; pharmaceutical intermediate demand is growing at 6% year-on-year.
- **Integrated Demand**: The THF–PTMEG (polytetramethylene ether glycol)–spandex value chain consumes ~90% of total THF output. Spandex production has grown at a CAGR of 8.53% between 2021 and 2026, underpinning robust, structural demand for THF.

III. Cost Drivers
- **Feedstock Prices**: BDO accounts for 60–70% of THF production cost. Driven by surging demand for biodegradable plastics, BDO average prices rose 8% year-on-year in 2026, pushing up THF production costs by RMB 500–800/ton.
- **Energy Costs**: Coal price volatility significantly impacts coal-based BDO routes. In Q2 2026, average coal prices increased 12% year-on-year, prompting some producers to curtail output and support pricing.

IV. Regional Market Characteristics
- **Henan’s Competitive Edge**:
- **Industrial Cluster**: Enterprises such as Puyang Hongye have established a vertically integrated value chain—from corn cobs → furfuryl alcohol → 2-methyl-THF—with >80% raw material self-sufficiency, reducing production costs by 15–20% relative to externally sourced feedstock.
- **Bio-based Leadership**: Henan accounts for 60% of China’s bio-based THF capacity. Under government subsidy schemes, bio-based THF is priced RMB 800–1,000/ton lower than petrochemical-based THF.
- **East China Competition**: Shanghai and Jiangsu leverage import channels to serve high-end electronic-grade markets, where such products represent 40% of regional sales. However, prices here exhibit greater volatility—3–5 percentage points higher than Henan—due to international price linkages.

Analysis & Outlook
1. **Upward Pricing Pressure**: Sustained BDO price strength, gradual ramp-up of bio-based capacity, and summer environmental compliance restrictions collectively suggest that the Q3 2026 price center will hold at RMB 11,500–12,000/ton.
2. **Structural Divergence Intensifies**: Pharma-grade and electronic-grade THF—characterized by high technical barriers—command premiums of 20–30% over industrial-grade. Meanwhile, policy support for bio-based THF is expected to lift its market share to >10% by 2027.
3. **Regional Arbitrage Opportunity**: Logistics costs from Henan to East China range between RMB 300–400/ton. When inter-regional price spreads exceed RMB 800/ton, cross-regional trading becomes profitable.

Forecast
- **Short Term (1–3 months)**: Prices expected to oscillate between RMB 11,300–11,875/ton; monitor BDO plant maintenance schedules and typhoon-related logistics disruptions in August.
- **Medium Term (6–12 months)**: As bio-based capacity scales up, petrochemical-based THF faces downward pricing pressure; average prices are projected to ease to RMB 10,800–11,200/ton in Q1 2027.
- **Long Term (1–3 years)**: Supported by sustained spandex demand growth and national policies promoting biodegradable plastics, the overall THF market size is poised to surpass 120,000 tons/year. Bio-based THF’s market share is anticipated to rise to 15–20%.