For the Quarter Ending September 2023
During the third quarter, Bisphenol A (BPA) prices in the United States saw a pronounced and consistent upturn, driven by several key factors. Notably, there was a substantial surge in demand from the downstream Epoxy resin sector, acting as a strong catalyst for price growth. The market also benefited from stable cost pressures originating from the upstream sector, alongside escalating prices for imports entering US markets. The US BPA market experienced heightened pricing due to the construction industry's robust performance and a resurgence in the upstream market. This revival was fueled by increased activity in the residential housing sector during the latter part of the preceding quarter. Concurrently, the demand for upstream materials like Acetone and Phenol strengthened in response to the recovery in crude oil prices. Additionally, imports from the Asian market reflected higher price levels, driven by the strengthening market sentiment in Asia and the more favorable profit margins for exporters taking advantage of these dynamics. Demand from downstream sectors, including Epoxy resin and Polycarbonate, surged as the construction industry exhibited strong performance, supported by a thriving housing market. Moreover, the automotive industry was poised for a record-breaking year, further enhancing consumption rates, as both Epoxy resins and Polycarbonate find extensive use in these two sectors. Consequently, the United States witnessed a significant and sustained increase in BPA prices from 1514 per MT CFR Texas to 1648 per MT CFR Texas throughout the third quarter.
Throughout the third quarter of 2023, the prices of Bisphenol A (BPA) in the APAC region exhibited a consistent upward trend, primarily driven by several key factors. This included a substantial surge in demand from downstream industries, notably robust operating rates at Sinopec Mitsui and elevated crude oil prices. The increased prices of feedstock materials like Acetone and Phenol played a pivotal role in providing significant cost support to the BPA market. Notably, Sinopec Mitsui responded to the rising demand by increasing the operating rates of its 120 KTPA plant in Caojing, following a decline in the previous quarter. This move further contributed to the mounting cost support from upstream Acetone and Phenol, aligning with strengthening demand in the downstream Epoxy resins market during the third quarter, following a lackluster Q2. Procurement activities remained reasonably active, characterized by ample inquiries. As the third quarter progressed, BPA prices regained momentum, driven by firm cost support, an increase in active queries, and subsequent procurement activities. The consistent strengthening of crude oil prices over six consecutive weeks added to the overall cost pressures, particularly on key aromatics, and, consequently, kept feedstock Phenol prices firm. The prices fluctuate from USD 1123 per MT on an FOB basis to USD 1391 per MT on an FOB basis during the timeframe of July to September.
Throughout the third quarter of 2023, Bisphenol A (BPA) prices in the European region exhibited a consistent upward trajectory, primarily propelled by significant cost support from upstream sources. This surge in cost support was closely tied to the continuous rise in Brent crude oil prices, which persisted throughout the quarter. Concurrently, the demand dynamics for BPA in the European market remained relatively subdued, largely due to the presence of costly imports from the Asian market. This pricing imbalance resulted from shifting market dynamics that favored Asian countries. Notably, BPA prices experienced an improvement in August 2023, driven by a substantial increase in upstream cost support, particularly influenced by the steady rise in Brent crude oil prices during that month. The upstream Benzene market also followed a similar upward trend as crude oil prices strengthened over the past weeks, further exerting pressure and contributing to the price increases of Acetone and Phenol. Moreover, costly imports from the Asian region persisted as market sentiment in Asian countries improved with a recovery in demand dynamics and limited supply availability. The overall BPA market in Europe demonstrated resilience in the face of these factors as prices continued to climb throughout the third quarter of the year. The prices vary between USD 1785 per MT FD Rotterdam and USD 1808 per MT FD Rotterdam basis from July to September.
Bisphenol A prices rose sharply in the first half of the quarter in both Saudi Arabia and the UAE on the back of firm prices of the imports reaching the Middle Eastern shores. China, a key producer of Bisphenol A in the world, cut down the production rates in Q2, which curtailed the supply dynamics. The supply situation was further worsened when key BPA plants in China went for scheduled maintenance, creating havoc in the global market. Prices rose sharply in the Chinese market, and simultaneously, the imports became costlier into the quarter as buyers looked to secure material amidst improving demand in the Middle East. However, the prices eased towards the second half of the month, and prices went down sharply in the month of September 2023. Thus, after the conclusion of the third quarter, Bisphenol A prices in the United Arab Emirates market were assessed at USD 1490 per MT on a CFR basis.
For the Quarter Ending June 2023
The prices of Bisphenol A in the US have continued to follow a bearish trend in the overall Q2 of 2023, the same as the previous quarter in the backdrop of prevailing market conditions, as nominal changes in the significant factor were detected. Adequate supply in the domestic market resulted in light downstream demand of the polycarbonate industry and cheaper inflows all over, which culminated in weak prices of Bisphenol A. Market participants indicated that dampened demand for bisphenol A in the overseas market led their dealers to supply the product at a lower price causing this sluggish price trend in the Asia Pacific. Additionally, the inventory gradually increased to a high level on the back of the continuous flows of imports from Asian countries such as Thailand, Singapore, Japan, etc. However, local demand has remained muted with weak purchasing activity due to increased interest rates imposed by federal reserves in the US. Thus, at the end of the second quarter of 2023, the prices of Cumene were closed at USD 1480 /MT CFR, Texas.
The prices in the Asia Pacific region have been governed by a bearish trend for the entire Q2 of 2023, following the declining slope of the previous quarter, except for the second week of April, when the price trend of Bisphenol A in China showcased an upsurge of 1.1%, which is due to an increase in demand from downstream epoxy resin industry and adequate inventory level. On April 21st, Bisphenol A transactions were closed mainly at USD 1380/MT for FOB Qingdao, with a weekly decline of 3.2%. The prices further declined throughout the rest of the quarter and closed at a value of USD 1115/MT on the last week of June 2023. Several facts can be attributed to this further decline in the curve. The demand from downstream epoxy resin and Polycarbonate plastics was negative for the market. On the other hand, several plants in Northeast China have recently commenced operations, resulting in abundant inventory levels, further softening the price dynamics of the market. Moreover, Bisphenol A continued its declining price trend on the back of weak cost support and limited demand pressure from downstream derivatives.
In the Netherlands, Bisphenol A prices edged more in a southward direction in the month of April 2023 as demand remained weak and inventory levels reduced. Market players were cautious and focused on the shift of the macro-crisis regarding the consumer price index. In addition, because of the steady wave of the Brent crude price curve, feedstock phenol prices also fell, which weakened their support for the price of finished products. Moreover, the procurement activities across overseas countries such as Germany, China, and the USA were limited as dealers awaited clarity over fresh stock coming in April, keeping Bisphenol A market sentiments low despite falling costs. The prices further decreased over the second half, that is, from mid-May to June 2023, and with a slight increase closed at a value of USD 1740 per MT FD-Rotterdam (Netherlands). This is due to the sluggish price trend in the Asia-pacific region, and the inflow of cheaper imports into the European market had culminated in the downfall of Bisphenol A prices.
During the first quarter of 2023, the Bisphenol A market experienced sluggish sentiment in the North American region. In the USA, prices continue to decline owing to weak demand from downstream Polycarbonate and epoxy resin and soft prices of the imports reaching US shores which was further exacerbated by declining freight charges. Also, Covestro LLC in Texas had stagnant Bisphenol A production while there were steady imports from Asian countries like China and Japan as the supply chain was not disrupted, and there was no port congestion, leading to ample material availability in the domestic market. The Federal Reserve's decision to increase interest rates to combat inflation in the US affected consumer confidence, resulting in poor buying sentiment in the domestic market. Consequently, there were a limited number of queries from end-user industries. As a result, the CFR basis evaluation of Bisphenol A discussions was USD 1720/MT on March 31.
Bisphenol A prices showed mixed sentiments in the Asia-Pacific region during the first quarter of 2023. Initially, Bisphenol A prices decreased owing to sluggish demand fundamentals, weak cost pressure from feedstock Phenol, and ample product availability in the region. Prices slightly increased in the mid-quarter following the conclusion of the Lunar New Year holiday, as market participants replenished material available in the domestic market. Moreover, rising prices of feedstock Phenol and Acetone increased the production cost of Bisphenol A in the Asian market. Despite this, demand from downstream Polycarbonate and epoxy resin remained sluggish in the regional market. In the final month of the quarter, there was a continued signal of bearishness in Bisphenol A prices, supported by low demand and ample inventories among local merchants. Furthermore, imports from other Asian countries remained firm, and feedstock prices dropped, putting downward pressure on Bisphenol A prices. As a result, the FOB Qingdao settlement price for Bisphenol A was USD 1385/MT on March 31.
The Bisphenol A market in Europe experienced a bearish sentiment in the first quarter of 2023 due to weak demand and firm inventories in the regional market. In Turkey, Bisphenol A prices decreased as most users from downstream Polycarbonate and Epoxy Resins had already purchased their required inventories, and supply was sufficient among local merchants, supported by enough imports from the Asian market. Furthermore, supply chains in Turkey improved after the devastating earthquakes, with no major disruptions reported by market participants and no port congestions. Asian suppliers offered low-price quotations to European traders as they were trying to liquefy their stock. However, buyers in the region remained cautious and adopted a wait-and-see approach toward the pricing trend. Consequently, the price of Bisphenol A on a CFR basis settled at USD 1730/MT on March 31.