Highlight: PC Gross Profit Hitting 7-Year High

Since June, the Chinese PC price has been increasing continuously due to the unit failures, tight supply, bullish sentiment and increasing USD price in the futures market. The price for some grades of PC even surged by RMB 1,000/mt within one day. Some Chinese-made PC also increased by RMB 600/mt within one day.

The BPA production was strongly impacted by the overhauls and low operating rates. However, curbed by the strict environmental protection policies and hot weather, the operating rates at main downstream EO resin market were low, and the demand was tepid. Offers for BPA in June and early July increased continuously. However, deals were limited at high prices, and most market players executed profit taking strategies. As a result, the negotiations for BPA decreased.

The price scissors between BPA and PC enlarged, and the PC gross profit obviously increased. As we can see from the chart below, the gross profit for Lotte 1100 is more than RMB 6,000/mt, which reached the peak since 2010.

The Chinese polycarbonate (PC) market price hovered at high recently. Some relatively low-price offers continued moving upwards. The supply from some grades of PC was tight. PC market players operated positively, and low-price offers were barely seen. As for demand, the operating rates stayed low, and the downstream demand was tepid. The environmental protection policies were strict, and the recovery of PC demand was unclear in the future. With the arrival of some imports, the offers for some PC imports slightly decreased.