(ICIS) -- Prices of butanediol (BDO) in Asia appear poised for a sharp drop in the coming weeks, as a result of extremely weak demand from the polyurethane (PU) segment, several market sources said on Wednesday. A major Western producer said that its key customers have procured BDO cargoes at $3,150/tonne (┬2,268/tonne) CFR (cost & freight) CMP (China Main Port). This is a decline of $150-250/tonne from prices assessed at $3,300-3,400/tonne CFR CMP on 18 October, according to ICIS data.
BDO is used primarily in the application of PU in the leather industry in China, while PU is used in the production of shoe soles.
Demand from the PU segment is likely to remain weak as the result of shoe-factory closures amid an ongoing regional credit crisis at Wenzhou city in Zhejiang province.