The European Union (EU) announced on Jun 24 that it would impose anti-dumping duties of 105.6% to 113.7% on 1,4-butanediol (BDO) produced in China. The duties were applied on Jun 25. In April, the Chinese government abolished the 13% export tax rebate for domestic companies exporting BDO. As a result, Chinese BDO significantly lost competitiveness in the overseas market and the exports sharply decreased from April onward.

BDO is a feedstock for plastic and chemical fibers. Chinese BDO markers used to focus on exports but had no choice but to switch to domestic sales. As a result, supply is increasing in the domestic market. Under such circumstances, BDO prices are falling in the China domestic market.

With profitability worsening along with a decline in exports and prices, several BDO facilities had been carrying out turnaround and production cuts since June. Operation rates of the facilities were low.

On the other hand, in Europe, as feedstock procurement costs rose, more players were increasing imports of final products made from BDO rather than BDO itself. In this situation, exports of such final products from China are expected to grow going forward.

Chinese BDO makers are predicted to boost sales outside Europe such as Southeast Asia, South Korea and Taiwan. In particular, China seems to focus on sales to Vietnam.