PBT: turnaround intensive worldwide under sluggishness in Apr

PBT polymer units intensively had turnaround within China and abroad, with run rate keeping refreshing new low

Factories outside China:
BASF, DuPont and LANXESS announced force majeure amid feedstock shortage.

BASF: On April 19th, BASF announced that its European company had recently declared a shortage of raw materials due to the force majeure declaration of some key raw materials, and the force majeure of PBT/ULTRADUR polymers and compounds became effective immediately.

DuPont: DuPont issued a "Supplementary notice of Force Majeure on Crastin PBT products": since INEOS, a major supplier of PTA (one of the key raw materials needed to manufacture Crastin PBT polymers), announced force majeure on March 2, 2021, but the future delivery time has not been confirmed by now. The PBT production plant of DuPont in Germany would be closed on April 15, 2021 and will remain offline until sufficient raw materials are available. DuPont said that the severe shortage will last until June 2021 based on current status.

LANXESS: supply of key feedstock was affected due to the force majeure of raw material recently, which is hard to switch temporarily. Thus, it is forced to suspend the production line of PBT polymerization and recombination. It will be not able to produce Pocan products for at least 5 weeks and the delivery is suspended.

Factories within China:
Operating rate of PBT polymer plants was not high in Mar, averaged at 51%, and is estimated to be 33% in Apr, hitting the lowest in recent years after Sinopec Yizheng, Meizhouwan, Blue Ridge Tunhe and Meiyuan increased turnaround, Kaixiang and Jihua from Sanfame remained offline for long and most units only ran at 50-70% of capacity.

Monthly operating rate and production of PBT plants in China

PBT price continued dropping in Apr

PBT value chain extended lower in Apr. Mainstream trading price of PBT chip declined to 17,000-18,000yuan/mt by now from 20,000-23,000yuan/mt in early-Apr, mainly attributed to dramatically declining BDO price.

Export price was around 3,000yuan/mt higher than domestic selling price.

Demand: downstream demand for PBT yarn remained slack and buyers were inactive in purchasing high-priced feedstock.

Cost: price of PTA was in consolidation in Apr. Operating rate of PTA plants dropped in Apr due to some turnaround, while stocks of PTA decreased amid high run rate of PET bottle chip factories. Meager processing spread and upstream PX, naphtha and crude oil market also rendered support to PTA price. However, strong upward momentum was lacked in downstream and upstream market. Therefore, price of PTA was in range bound.

BDO market was dominated by weakness in Apr. Operating rate of some downstream plants was low. Bidding price of BDO was low, and buyers showed strong looking-on mindset. Sellers held flat price. Spot sellers were eager to sell and price was negotiable in discussion. Downstream buyers mainly purchased to cover contractual basis, with subdued spot trading. Therefore, BDO price remained soft.

Weakness is expected to continue covering PBT market within China in May. Feedstock BDO may extend sluggishness, resulting into fragile support from cost side. Some PBT plants are expected to restart operation, but downstream buyers are likely to keep retreating to sideline.