Asian polycarbonate (PC) prices declined in late August due to oversupply, weak demand, and limited cost support from raw materials. Despite stable production and high inventory, downstream activity remained sluggish. Traders faced financial pressure, leading to discounts and slow circulation. Market sentiment stayed cautious, with no signs of short-term recovery.
Key Highlights
The Asian PC market also remained under pressure during the last week of August, with prices further declining owing to continued oversupply and weak demand. Market players indicate that even as production levels have remained stable, the market is still dull, with no indications of recovery in the near future.
Raw material movements have offered limited relief to the current situation. Bisphenol A, an important PC feedstock, was kept firm at historic lows all through late August. While upstream phenol and acetone were up modestly, their effect on bisphenol A was minimal. Bisphenol A supply is still loose, and the demand has not improved, so there isn't much scope for an increase. Consequently, PC manufacturers are not finding substantial cost assistance from raw materials, further destabilizing the foundation of the market.
On the supply side, local PC accumulative companies had high and consistent operating levels, at an average of 81.9%. Weekly production remained close to 70,000 tons, indicating robust momentum in production. As Wanhua Chemical planned to undertake short-term maintenance in some of its plants, others like Sichuan Tianhua, Cangzhou Dahua, and Pingmei Shenma resumed production earlier in the month. Shengtong JuRMB was also planning to resume production. All this has maintained supplies in plenty, and the pressure on producers for shipments remains unaffected. With inventory levels remaining at elevated levels, the supply side still provides weak support for price stabilization.
Demand conditions are still soft. Even though at the seasonal crossroads between off season and peak season, downstream factory loads have not recovered. Inventory levels are low, and there has not yet been any indication of early restocking activity. High social inventory and plentiful on-site supply still bear down on sentiment. Foreign trade orders are soft, and terminal businesses are fighting high-priced goods. Traders under financial strain have raised discounting practices to drive sales. The flow of goods is sluggish, and the majority of transactions are confined to contract deliveries, and that too is a cautious strategy all around.
Diving deep into ChemAnalyst’s Quantitative Analysis
As per ChemAnalyst, as August ends, the PC market in the domestic country is still not turning around. In September, PC prices are projected to rise due to lessened selling pressure and restocking demand. The bounce likely accelerate in October and November as seasonal demand from automobiles and electronics enhances offtake. By November-December, PC prices are expected to stabilize at higher levels, aided by improved buyer mood and balanced supply-demand, though dampened feedstock costs will prevent strong gains.
