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The price of 1.4-Butanediol(BDO) in the first half of 2018 was similar to that of last year except for the overall price level. From January to April 2018, the market price continued to rise. From January to March, which was around the Spring Festival holiday, the manufacturers' operating rate remained low. This year's downward price movement began in April, earlier than last year. This is primarily due to the sluggish demands from downstream sectors such as PU resins for synthetic leather and PU resin for shoes sole, which had reduced operating rate as a result of the environmental inspection and only made purchase to meet rigid demand.
Recently, 1.4-Butanediol(BDO) facilities that had been shut down for maintenance or catalysts replacement were restarted. The industry's average operating rate increased slightly, and the manufacturers began to feel the inventory pressure.
As the second round of environmental inspection advances, producers of PU resins for synthetic leather and those for shoes sole are seriously affected, with numerous small producers that are not located in industrial parks, don’t obtain relevant licenses and pollute environment being closed or required to reduce production. This results in lower production load across the industry and in turn reduced demand for BDO. Meanwhile, BDO demands from main downstream sectors of THF and PTMEG are low as they are now in the off-season and customers only make purchase to meet rigid demands.
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