1,4-Butanediol diglycidyl ether

1,4-Butanediol Diglycidyl Ether (622) Market Dynamics Intelligence

I. Recent Price Trends
- Domestic Market: Over the past 30 days, the mainstream transaction price in the East China region fluctuated between 28,500 and 30,200 RMB/ton, representing a week-on-week increase of 1.8% and a year-on-year increase of 4.3%.
- International Market: The FOB price at major Chinese ports remained in the range of $3,850–$4,050/ton. Affected by fluctuations in the USD exchange rate, import costs increased by approximately 2.5%.
- Regional Price Differentials: Prices in South China were 300–500 RMB/ton higher than in East China due to elevated logistics costs. In North China, prices carried a premium of approximately 2% due to tight supply.

II. Supply and Demand Fundamentals
- Supply Side:
- Domestic capacity utilization stood at approximately 78%, a 3 percentage point increase from the previous month, primarily driven by the restart of a 100,000-ton/year facility in Shandong.
- Import volumes decreased by 12% month-on-month, mainly because supply shortages in Europe led to reduced diversion of cargo to China.
- Inventory Levels: Port inventory was approximately 12,000 tons, a 15% decrease from the previous month. Factory inventory turnover days shortened to 7 days.
- Demand Side:
- The operating rate of the downstream epoxy resin industry remained stable at 65%–70%, accounting for approximately 45% of the demand for 622.
- Demand in the polyurethane industry grew by 8%, primarily driven by increased orders in the wind turbine blade sector.
- Export orders increased by 10% month-on-month, with strong demand in Southeast Asia.

III. Costs and Profits
- Raw Material Costs:
- 1,4-Butanediol (BDO) prices remained stable at 11,500–12,000 RMB/ton. Epichlorohydrin (ECH) prices saw a slight increase to 8,800–9,200 RMB/ton.
- The comprehensive cost of raw materials accounted for approximately 65% of the total, a 1 percentage point increase from the previous month.
- Production Profits:
- The industry average gross margin was approximately 18%–20%, a decrease of 0.5 percentage points from the previous month, mainly due to margin compression caused by rising ECH prices.

IV. Impact of Related Products
- Substitutes: The price of Ethylene Glycol Diglycidyl Ether (EGDE) fell by 2% due to intensified competition stemming from oversupply.
- Complements: Bisphenol A prices rose by 3%, increasing epoxy resin costs and indirectly supporting 622 prices.

V. Policies and Industry Dynamics
- Environmental Policies: Jiangsu Province has strengthened VOCs emission controls, limiting the operating capacity of some small and medium-sized enterprises, which may further tighten supply.
- Industry News: A leading domestic company plans to add 50,000 tons/year of capacity, expected to come online in 2025, which may alleviate long-term supply pressure.

VI. Analysis and Judgment
1. Short-term Drivers: Low supply-side inventory combined with rigid downstream procurement supports further price upside, although the magnitude of the increase is constrained by raw material costs.
2. Medium-term Risks: The recovery of European supply may lead to a rebound in import volumes. Coupled with the expectation of new capacity additions, prices may face downward pressure.
3. Long-term Trends: Growing demand in sectors such as wind power and electronic packaging will support the market. However, capacity expansion may lead to intensified competition.

VII. Forecasts
- Price Range: Over the next month, the mainstream domestic price is expected to operate in the range of 29,000–31,000 RMB/ton, while the international FOB price is projected to be between $3,900–$4,150/ton.
- Supply and Demand Changes: In September, the downstream sector enters the traditional peak season, with demand expected to increase by 5%–8% month-on-month. On the supply side, reduced maintenance schedules may lead to a slight rebound in inventory.
- Strategic Recommendations: Downstream enterprises should replenish inventory at lower prices. Traders should monitor exchange rate fluctuations and import arrival times to mitigate the risk of price inversion.