Event

From macro-strategy perspective, in view of the economic situation of the major world economies in 2015, the global economy is turning to modest growth in the medium and long run, which is beneficial to the increase of demand for bulk commodities, especially the industrial products. And the commodity price is likely to fall stabilized in the second half of 2015. Since 2014, the global economic activity has been weaker than expected, and the whole global economy has remained a slow recovery state. IMF, World Bank and other international organizations and institutions have constantly lowered the global economic growth expectation. However, at the same time, the global economic growth pattern shows some new changes. The economic recovery of developed countries is picking up speed, different from the economic downturn status in the last two years. But there appears divergences among the developed economies: the U.S. economy shows strong resilience; yet the Eurozone and Japanese economy basically fall into standstill; as to the emerging economies, their economic growth slows down further. Thus, as a whole, the global economy growth situation of 2015 will be better than that of 2014, but with limited growth, due to the slow economic growth of Europe, Japan and emerging economies. In 2015, the U.S. dollar index will remain the upward trend. And the corresponding bulk commodities market, as a whole, will appear a relatively big fluctuation and a weak pattern, from overall downward to a through modest rebound, By retrospecting the Chinese economy, we think that the year 2014 is the key year for the economic restructuring and comprehensively implementing the spirit of the 18th CPC (Communist Party of China) National Congress. In 2014, it was still crucial for Chinese economy to adjust the industrial structure, optimize the allocation of resources and reduce the excess capability. Through the outlook of 2015, we think the global economy is overall stabilizing, but domestic demand growth is still facing the downward pressure. The anticipated economic growth rate is about 7.1% to 7.3%. In recent years, the domestic BDO market has been falling to downturn from its peak. From the market price trend of recent years, it can be seen that the spot price of BDO has appeared relatively big fluctuation as early as 2012. And from 2013 to 2014, almost one year, its price swung back and forth around 13500 RMB (ton, same blow). However, in April 2014, the falling market model restarted, which sustained three months and the price was down to 8700 RMB. Due to the high factory inventories and abundant supply, the market-price Yin fell has continued since March this year, and the historic lows is refreshed again. According to statistics, the BDO price has fallen from 9850 RMB/ton in March 2015, to 8100 RMB/ton on May 5, 2015, with a total decline of 17.8%. In the aspect of import and export, the international mainstream of BDO production process is petroleum routes, namely Maleic Anhydride Process, which can produce high-quality BDO with low water content, small investment and environment protection. At the same time, the Maleic Anhydride Process can also produce BDO with the co-production of THF and γ-GBL. This process has gotten high recognition in the international market. But, the BDO production in China mostly adopts the Acetylene-formaldehyde Process, which gets low acceptance in the international market, and has small exports in spite of excess supply in domestic market. Thus, it can be seen that BDO produced in our country faces much difficulty if going abroad. In addition, since December 25, 2014, the anti-dumping duties imposed by China on the 1, 4- butylene glycol imported from Saudi Arabia and Taiwan, has terminated, which will worsen the BDO market situation. The competition in our domestic BDO market will be more fierce with the BDO produced by foreign manufacturers flooding into China. Thus, the market situation is hard to get better. To sum up, for now, our domestic BDO market is moving forward with a range of pressures. It desiderates a way out. Apart from exportation, can there be another light guiding domestic enterprises out of this adverse situation? How can domestic enterprises draw a promising blueprint under such a rigorous situation?