Quarterly Update on Global Polycarbonate Market
For the Quarter Ending June 2021
Polycarbonate (PC) prices climbed across the North American region during this quarter, backed by sturdy demand from the downstream manufacturers and tight supply activities. The demand for Polycarbonate from COVID related equipment like face shield, testing kits, ventilators and other medical equipment etc. remained firm. Feedstock Bisphenol A (BPA) kept on rising in the meantime due to sturdy demand and tight supply activities across the region. In addition, prolonged plant shutdowns since February, exacerbated the overall tightness in supply activities for PC and feedstock BPA in the USA. Consistent surge in prices of PC was observed in USA, which settled at USD 4085/MT (extrusion moulding) and USD 4375/MT (injection moulding) during last week of June in USA.
Polycarbonate demand dynamics varied in the Asian market country over country. China witnessed firm demand from downstream end users due to strong economic recovery from the pandemic. On the other hand, in India, price of PC in India kept slipping throughout the quarter due to dented demand under second wave of pandemic in the country. Feedstock BPA was increasing till May and then eventually fell in June due to muted demand for Polycarbonate. The price of Polycarbonate was assessed at USD 2049.2/MT and USD 3995/MT for injection moulding grade in India and China towards the end of Q2.
The European market had firm demand for Polycarbonate during Q2 amid critical shortage of feedstock chemicals, which supported the overall price of PC and other polymers. Dented supply of upstream chemicals led to an overall hike in supply chain of PC across the region which compelled manufacturers to raise their product prices to sustain their margins. Manufacturers like Covestro announced price hike of around USD 588/MT in its PC product, effective from May 2021. While, previously, Trinseo also announced price hike of around USD 470/MT on its PC resins in Europe due to similar reasons.
For the Quarter Ending March 2021
Freezing cold temperature across the US Gulf Coast disrupted the total polymers and petrochemicals output of North American region in the quarter ending March. Most of the production activities remained curtailed due to unfavourable plant operating conditions, thus the supply of Polycarbonate compounds remained in narrow range throughout the quarter. The prices of Polycarbonate witnessed month on month increment, in January prices rose by +USD 219.4 per MT followed by gradual increments in the next month. During March, prices finally settled down at USD 3910 per MT after rising 20.67% since January. As the production activity across the region is resuming effectively, Polycarbonate prices are anticipated to calm down in upcoming quarter.
The Asian market experienced shortage of feedstock chemicals during Q1 2021 amid moderate to high demand from downstream end users. Feedstock Bisphenol A supply remained critically short, while the demand from other sectors like Epoxy resin market remained high. Hence the prices of feedstock chemicals skyrocketed during this time frame across Asia. In addition, prices of other upstream chemicals like Benzene and Propylene experienced double-digit rise, which levied a direct impact on the prices of Polycarbonate. Meanwhile, the FOB prices in China, during March settled at USD 3050 per MT after rising 127.6% since January 2021.
The European market observed similar trends in line with other regions, with shortage of feedstock chemicals, amid high demand from end users. The demand from downstream end users were observed stable to firm, however the supply remained critical due to lower imports from USA as the production activities were halted due to the freezing winter storm. In addition, imports from Asia also remained expensive due to higher freight cost and shortage of shipping containers.
For the Quarter Ending September 2020
During the third quarter, the Polycarbonate market received firm support from all major industries except automobile and transportation which remained shrouded with uncertainty amid looming demand recovery due to the pandemic. Polycarbonate exports to Asia were heard registering volume growth, driven by surging demand for resins used in protective gears post reopening of several manufacturing sectors. As effects of COVID-19 eased, suppliers noticed a sharp uptick in the material sourcing compared to previous quarter. However, supply was largely disrupted due to maintenance turnarounds, creating potential tightness for the demanded grades, such as extrusion and optical. The Chinese PC reported healthy gains with automotive sector gradually picking up post a double-digit fall in Q2. High feedstock prices further led to unhealthy spreads between BPA and PC for producers. Tracing the inclining trend, the general-purpose PC resin prices matched USD 1900 per MT levels across the Indian markets during Q3.
Sustained demand for electronics and engineering plastics triggered a sharp rise in the American PC demand which started facing supply side issues towards the end of Q3. In September, a major PC producer, Covestro declared force majeure at its 260 KTPA plant located Texas. The situation was exacerbated after Hurricane Laura led to further disruptions in the functioning of production lines. Regional traders found the quarter quite responsive in terms of demand while the US economy was still struggling to bounce back as a large population stayed-at-home, keeping most businesses affected. Commenting upon the pricing delta, margins remained intact with the fall in automotive offtakes largely offset by the buoyant medical plastics demand.
Picking itself up from economic disruptions caused by the COVID-led slowdown, the PC demand in Europe grew higher in the third quarter, driven by improved fundamentals in the construction and medical plastics sector. Russia's overall consumption of PC granules (excluding import-export data from Belarus) rose in January-October 2020 by 21% year on year. Additionally, some players reported that export opportunities in Asia were competitively attractive for European producers while several consuming industries turned back to operations with the exception of automotive sector, which remained pressured under the global slowdown. The quarter ended with news of SABIC and electric utility company Iberdrola entering into a deal to set up the world’s first large scale Polycarbonate facility in Spain, which would run entirely (100 percent) on renewable energy.