According to data from China Drying Network, the price of 1,4-butanediol (BDO), one of the raw materials for spandex production, has fallen from the price of 15,133.33 yuan/ton at the beginning of the second quarter to the latest 13,716.67 yuan/ton, a drop of about 10%. Industry insiders believe that overcapacity has led to a sharp decline in BDO prices, and the economic performance of production companies has been negatively affected.
The data shows that in 2012, the total global BDO production capacity reached 2.18 million tons, an increase of 13% over the same period last year. Among them, the performance of mainland China is particularly eye-catching, with a total capacity of 719,000 tons, accounting for 33% of the world. If all projects under construction and planning and construction are completed, China's total BDO production capacity will be close to 3 million tons, and the average annual growth rate of production capacity will exceed 15%. According to forecasts, the demand for China's BDO market will be only 600,000 to 800,000 tons by 2015.
Just a few years ago, BDO was still a product that needed to be imported. Prior to 2007, due to the restriction of technology introduction, the self-sufficiency rate of China's BDO products was always below 50%, and the price of BDO was maintained at a level of 20,000 yuan/ton for a long time. After the efforts of the entire industry, in 2010 it became a key node of China's BDO industry. The self-sufficiency rate jumped from 57.14% in 2009 to 75.36%.
The combination of technological breakthroughs and capital led to a dramatic increase in newly built and expanded BDO production facilities, and BDO prices also began to decline from its peak. The domestic BDO market price has fallen from 19,000 yuan/ton in April 2012 to the current 14,000 yuan/ton, and the operating rate of equipment has generally declined, showing a clear trend of oversupply.
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