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BDO SUPPLY REMAINS TIGHT IN EUROPE

December 3, 2020
Producers are seeking big increases as demand improves.

BDO supply remains tight in Europe as the Asian market rallies and the arbitrage to Europe stays firmly shut.

As seen in many other markets, the strong demand in China continues to reduce exports from the region to Europe.

And BDO is seeing a similar pattern, namely high Asian prices resulting in low volumes available for the European market.

One seller said buyers in Europe cannot get all the volumes they want and some are getting turned away.

As demand surged in Asia, 1,4-butanediol (BDO) prices spiked in the region.

But as Europe had to grapple with the pandemic for much longer, demand has not been as strong and prices are now much lower.

However, the European markets are now recovering fast, with a considerable improvement in demand.

This will provide a boost for producers who have announced big increases recently on BDO, one major producer around plus €300/mt.

Nevertheless, the price gap of BDO between Asia and Europe is so wide that not even the announced increases will be enough to attract imports.

As such, should demand remain healthy in Europe, BDO buyers will soon have to operate in a market environment with higher prices and tight availability.

Polybutylene terephthalate (PBT) is one of the downstream market for BDO and it is also improving.

There have also been announcements of increases on PBT.

For quite some time, PBT suffered from a weakened automotive sector and the pandemic.

However, demand has now improved and certainly increased the chances of price increases in Q1.

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