Industry Insight: Chronic supply-demand imbalance, export headwinds, and inventory accumulation keep China’s BDO market in a low-level stalemate—short-term rebound hinges on Spring Festival stockpiling.
Butanediol (BDO) is a critical petrochemical intermediate widely used in polyurethane, spandex, engineering plastics, and electronic chemicals. As December begins, China’s BDO market continues its weak volatility trend, pressured by persistent oversupply, export challenges, and sluggish price momentum. Below is a comprehensive analysis of market dynamics and future outlook.
China’s BDO market remains trapped in a low-level stalemate in December, with three key factors dominating the trend:
• Chronic oversupply: Capacity expansion outpaces demand growth by a wide margin.
• Export pressure: EU anti-dumping policies and Saudi competition weigh on overseas sales.
• Inventory accumulation: Stock levels have been on the rise since midyear, suppressing price upside.
Despite marginal growth expected in both supply and demand this month, the core supply-demand imbalance is unlikely to be significantly alleviated.
By the end of November 2025, China’s total BDO production capacity reached 5.461 million tons per year (t/a), representing a 16.39% year-on-year increase. Production growth accelerated sharply in the second half of the year, with output expanding at a rate far exceeding the growth of downstream demand—laying the foundation for chronic oversupply.
December BDO supply is expected to grow 2.34% month-on-month, driven by the gradual restart of some previously idled plants. However, the overall supply volume will remain at a high level, continuing to exert pressure on the market.
Supported by capacity expansions in downstream sectors (e.g., spandex, polyurethane), China’s BDO consumption increased 8.64% year-on-year. Despite this growth, the demand uptick is insufficient to absorb the rapid supply expansion, leaving the market in a state of oversupply.
December downstream demand is projected to rise 2.33% month-on-month, slightly lagging behind supply growth. The demand recovery remains modest, with most downstream enterprises maintaining “just-in-time procurement” strategies to avoid inventory risks.
China’s BDO exports face significant headwinds:
• EU anti-dumping policies: Trade barriers restrict access to key European markets.
• Saudi competition: Rising production capacity in Saudi Arabia intensifies global supply competition.
• Export data: From January to October 2025, China’s BDO exports dropped 15.34% year-on-year, with overseas market share shrinking.
Meanwhile, BDO imports surged 256.86% year-on-year during the same period, flooding the domestic market with additional supply and further exacerbating the oversupply situation.
Since mid-2025, China’s BDO inventories have continued to accumulate across the industrial chain. High inventory levels have significantly weakened producers’ pricing power, pushing market prices down from earlier highs and trapping the market in a low-price stalemate between suppliers and downstream buyers.
As of early December, inventory levels remain above the historical average, limiting room for price rebounds in the short term.
• Overall trend: The BDO market is expected to maintain weak performance in December, with the supply-demand imbalance remaining largely unchanged.
• Price momentum: Prices are likely to fluctuate within a narrow range, with limited upside due to oversupply and inventory pressure.
A short-term price uptick may occur if downstream enterprises engage in pre-Spring Festival stockpiling. The extent of any rebound will depend on two key factors:
1. The volume of stockpiling purchases by downstream buyers.
2. Market acceptance of current price levels.
Without significant stockpiling demand, the market is likely to remain in a low-level stalemate until the end of the year.
This analysis is based on data from domestic BDO producers, traders, and downstream enterprises. For real-time price tracking, capacity updates, or customized market reports, refer to professional chemical information platforms or industry research institutions.
