For the Quarter Ending June 2023
Overall, the outlook for Bisphenol S in the US market during Q2 2023 remained uncertain. The downstream industries’ performance remained largely stable, with steady offtakes from the automotive industry and improved market fundamentals towards the second half of Q2 2023. Furthermore, the automotive industry showed positive growth in passenger car registrations in the US, with an increase in the market share of battery electric cars and hybrid electric cars. While this growth could positively impact the chemicals and polymers industry, demand for Bisphenol S in the construction industry remained lackluster, potentially due to factors like overstocking and weak demand in downstream markets. In the US, Bisphenol S prices in the US were assessed at USD 3200 per MT on FOB basis as of Q2 2023 ending.
In Q2 2023, the Indian domestic market for Bisphenol S experienced a bearish trend, with prices consistently declining due to the influx of cheaper imports from China, South Korea, and Japan, resulting in a monthly price change of -3%, -5.9%, and -3.2%. The market situation remained weak as sluggish prices in the Asia Pacific region led to an abundance of low-cost imports. Supply remained moderate, with steady imports, while buyers capitalized on the bearish market to negotiate better deals. Demand for Bisphenol S was low to moderate as downstream industries like Epoxy resins, and Polycarbonate showed limited new orders, and a wait-and-see sentiment prevailed. Currency fluctuations also played a role, with the Indian Rupee experiencing fluctuations against the USD. Overall, industry players faced challenges from the downward price trend and should carefully monitor market dynamics to make informed decisions. As of June 2023, Bisphenol S prices in Asia were assessed at USD 2185 per MT.
Bisphenol S, heavily employed in the construction industry via epoxy resin and Polycarbonate, faced challenging market conditions in the European regions during Q2 2023. In Germany, the disparity between contract and spot prices became a major concern for chemical producers, leading to persistent weak demand. The difference between contract and spot prices widened significantly, particularly affecting the olefins markets.
Furthermore, LANXESS, a specialty chemicals company, experienced below-average market expectations for Q2 2023, with weak demand continuing into the second quarter. The construction industry, along with the electro/electronics and consumer-related sectors, faced demand weakness, impacting the utilization and earnings of automotive companies. LANXESS revised its outlook for FY 2023 downward, reflecting the challenging business environment. Bisphenol S prices in Europe were assessed at USD 3100 per MT after the conclusion of Q2 2023 on an FD basis.
For the Quarter Ending March 2023
In the US, Bisphenol S prices continued their downturn into the first quarter of 2023 on the back of sluggish demand fundamentals and ample material availability. In terms of operating rates, production remained firm in the domestic market, availing ample material, while weak demand dynamics in Asia prompted Asian exporters to send material to the US shores. This resulted in supply dynamics outpacing the available demand from Epoxy resins and Polycarbonate. Meanwhile, the freight market remained overly steady on the Asia-North American routes, resulting in declining freight and shipping costs. Thus, after the conclusion of the first quarter, Bisphenol S prices were assessed at USD 1905 per MT.
In the Asian markets, Bisphenol S followed a bearish trend throughout the first quarter of 2023 on the back of sluggish demand fundamentals despite some revival in the feedstock market. The snug demand fundamentals from downstream Epoxy resins and Polycarbonate have overshadowed any other market dynamics impacting the final prices of Bisphenol S. Feedstock Phenol prices have increased towards the second half of the quarter; however, it had a limited impact on the prices. Thus, after the conclusion of the first quarter, Bisphenol S prices were assessed at USD 1815 per MT on a FOB basis.
In Europe, the Bisphenol S market remained sluggish throughout the first quarter of 2023. The snug demand dynamics from the downstream Polycarbonate and Epoxy resins industry have culminated in a weak pricing trend in the European market. Meanwhile, not many European countries imports or produces Bisphenol S given the disruptive impact it has on the human body; thus, the quantity traded in European has been limited. However, the prices have followed the weak due to sluggish prices of the imports reaching the European markets. Thus, after the conclusion of the first quarter, Bisphenol S prices were assessed at USD 2210 per MT in the European market.
During the last quarter of 2022, Bisphenol S prices in the US market decreased due to cheaper imports. Prices have been following a downward trend for the past three months due to market uncertainties caused by rising inflation and fears of a recession in the domestic market. In response to these concerns, domestic producers have displayed mixed reactions. Some have chosen to reduce production to address the issue of oversupply, while others have offered discounts to maintain sales. However, demand for the product from the domestic market has also decreased. Imports from the Asian market have remained steady, despite a significant decrease in freight charges.
In the last quarter of 2022, the trend of decreasing prices for Bisphenol S persisted in the Chinese market. The market exhibited a lack of buying interest, with limited inquiries and small order quantities. Inventory levels were high, and the supply dynamics were described as stable to the firm, indicating ample material availability. Demand from downstream industries, Polycarbonate and Epoxy resins, remained stagnant or weak, leading to stable volume offtakes with few new orders from downstream users. Additionally, demand from the international market remained weak due to fears of a recession in the Western market, which resulted in low consumption rates.
In the final quarter of 2022, Bisphenol S prices continued to decrease due to the stable to weak demand dynamics and a steady influx of imports from South Asian and Far East Asian countries. The consumption of Polycarbonate and Epoxy resins remained unchanged, as reported by market participants, due to a lack of new orders. During this quarter, freight charges decreased significantly in the global market as supply chains returned to normal. Despite efforts by OPEC+ to stabilize crude oil prices through output cuts, the lockdown in China and the short-term weak demand outlook meant that these cuts had little impact on Bisphenol S prices. As a result, the cost pressures from upstream remained weak throughout the quarter for Bisphenol S.