Impending Concerns on Global Polycarbonate Prices, Raw Material Prices to Support

In the initial week of February 2024, the Global Polycarbonate (PC) market exhibited diverse trends across key regions, with fluctuating prices reflecting a complex interplay of geopolitical, economic, and industry-specific factors.

In Europe, the PC market witnessed a 1.6% increase in prices during the first week of February. This surge was attributed to supply constraints resulting from a significant decline in import shipments from the Middle East and Asia, exacerbated by escalating tensions in the Red Sea. The scarcity of supply prompted buyers to turn to domestic sellers, while spot prices experienced an upward trend due to material shortages and delivery disruptions from labour strikes. Despite challenges, positive indicators such as the slowest rate of decline in Eurozone business activity since August 2023 and stabilization in employment contributed to a nuanced market landscape.

Meanwhile, the PC market in the United States saw a 1% price increase, driven by a simultaneous 3% rise in upstream Crude Oil costs. Despite improved demand for PC from downstream industries, the market faced challenges related to heightened tensions in Yemen, particularly in the Red Sea. The situation led to logistical challenges, increasing freight rates, container prices, and insurance costs, impacting the overall market scenario.

In Saudi Arabia, the PC market experienced a 1% decrease in prices during the same period. This decline was attributed to a robust supply within the country, influenced by reduced exports amid the ongoing Red Sea crises. The heightened security concerns and increased costs of PC led to a bearish situation in the market. Manufacturing activities showed a decline, indicating the weakest expansion since January 2021, with slowing demand and cost pressures affecting new business growth.

China, on the other hand, witnessed a 1.4% decrease in PC prices, primarily influenced by the continuous decline in the domestic bisphenol A market. Despite an initial ample supply, downstream rigid demand remained sluggish, impacting PC costs. The overall operating rate of domestic PC experienced a slight decrease, contributing to a modest increase in supply. While factory prices showed a tendency to flatten, low enthusiasm among terminal enterprises for purchasing goods, focused on inventory digestion and limited on-site stocking demand, provided poor support for spot prices. Positive developments in China's manufacturing sector, as indicated by the Purchasing Managers' Index (PMI), signalled a rebound after a three-month decline starting in October 2023.

ChemAnalyst, predicts a potential increase in the global market prices of PC in the upcoming week, primarily driven by an anticipated rise in the price of the feedstock Bisphenol A due to its tight supply. The heightened costs associated with key components are projected to contribute to an overall elevation in the production cost of PC. The impending Chinese New Year is also expected to impact PC supply, with many manufacturing facilities, particularly in the petrochemical industry, either shutting down or operating at reduced capacity during the holiday period. This could lead to a temporary decrease in the production of chemical commodities. To counter potential disruptions, manufacturers and businesses typically intensify production levels ahead of the Chinese New Year, resulting in a surge in demand for raw materials, including PC. This increased demand is likely to influence prices as suppliers adjust to meet the heightened market needs, creating a dynamic market scenario in the coming weeks.