As of July 2024, the global average spot price of PBAT (polybutylene adipate/terephthalate) was quoted at $1,480/tonne, plummeting 32% from the beginning of the year, and breaking through the psychological barrier of $1,500 for the first time. This price has been close to the industry average cost line of $1,350/ton, marking the biodegradable materials industry has entered a brutal reshuffle stage.

Three major drivers of price dive

Overcapacity: China’s new production capacity reaches 2.1 million tons/year (68% of the global share)

Impact of new EU regulations: delayed certification of EN13432 leads to stockpile buildup

Raw material BDO price cuts: price of 1,4-butanediol, the key monomer, cuts to pieces

Capacity Landscape Reconfiguration: Who’s Leading the Price War?

China’s Top 5 (2024Q2 data)

Company Capacity (t) Cost ($/t) Strategy

Blonde Gold Technology 45 1,310 Share-preserving price cuts

Wanhua Chemical 38 1,290 High-end differentiation

Hengli Petrochemicals 30 1,350 Export subsidies

Tongcheng Xinmai 25 1,410 Switching to PBS

Xinjiang Lanshan 20 1,520 Production cut by 40% already

EU Certification Crisis: $200 Million Orders Pending

Certification Necklace Status

Testing Backlog: TÜV and other organizations have been queuing up samples to be tested for more than 4 months

Pass Rate Plummeting: Only 57% of products meet the standard under the new regulation (82% in 2023)

Financial Pressure: Cost of Single Certification Soars to $15,000 (Including Repeat Testing Fee)

Typical Enterprise Dilemma

Case: Jiangsu an exporter of 2,000 tons of PBAT film due to Certification delays:

Warehousing costs accumulated $85,000

Forced to sell at $1,250/ton (loss of $500,000)

Threat of technology substitution: the PHA downgrade strike

Cost gap closing fast

Indicator PBAT PHA gap

Price ($/tonne) 1,480 3,200 2.16x

Degradation cycle 180 days 90 days -50%

Capacity growth rate +12%/year +45%/year 33pct

Suggestions on Sourcing Strategy: Buyer’s Survival Guide

Best Sourcing Window Forecast

Short-term (2024Q3): can hoard at $1,400-1,450 range

Medium-term (2025Q1): may rebound to $1,700+ after implementation of the new EU regulations

Three Principles of Risk Avoidance

Avoid LTA: lock-in period suggested ≤3 months

Certification Bundle: require suppliers to provide pre-certification report

Hedging: BDO futures Hedging ratio is recommended to be 30%.

Industry Reshuffle Forecast: Survivor Characteristics

Types of enterprises expected to survive

Vertical integrators: self-produced BDO (e.g., Wanhua)

Technology leaders: with catalytic modification patents (e.g., Jinfa)

Niche specialists: focusing on medical/high-end film materials

Players about to leave the market

Single production capacity with cost > $1,450/ton

Export-dependent without EU certification

Small and medium-sized modification factories with tight financial chains

ACTION LIST: 180-Day Survival Plan

Must-do for manufacturers

Immediately start cost audit (target <$1,400)

Selectively shut down high-cost production lines

Apply for local government subsidies to stabilize jobs

Trader’s countermeasures

Switch to non-certified markets in Southeast Asia

Develop PBAT+PLA composites for hedging

Set up a price early warning system (recommend Platts data source)