Will PC Market Continue to Increase or Decrease?
As of August 18, the negotiation price of low-end injection molding PC material was RMB 13,500-15,150/mt, and the negotiation price of middle and high-end injection molding PC material was RMB 14,900-16,000/mt, up RMB 650-850/mt or 4.48%-5.96% from end July.
Several reasons were listed for the PC price increase in August.
First, the industry operating rate continued going down in August, and the domestic products’ supply was tight. In July, after the PC market’s fluctuation for a month, the PC price decreased in end July. However, the 100kt/a PC unit at Zhonglan Guosu New Material was shut down for maintenance suddenly, giving support to the PC market. Besides, the 450kt/a PC unit at Covestro ran at low loads from August. There were some problems with the new and old production lines at Wanhua Chemical in August. The operating rate of the PC unit at Lihuayi Weiyuan Chemical was average, and the PC unit at Hubei Ganning New Material continued being shut down. The PC unit at Sinopec Mitsubishi Chemical Polycarbonate (SMP) was shut down for maintenance on August 18. There were 7 sets of PC units running unstably or in shutdown, taking up 61% of the total capacity. At present, the operating rate decreases to below 47%. In August, major PC units’ problems need to be resolved, and the domestic supply hasn’t increased yet.
Second, foreign PC producers kept the offers firm, and the transaction volumes of imported PC were few. In August, the transaction volumes at Lotte Advanced Materials were only around 30% of those in July, and those at SABIC decreased by 20%. The offers at FCFC-Idemitsu Petrochemical were at highs in recent months, and those at LG Chemical increased steadily. Most market players were reluctant to sell the products, and they kept the offers firm. Thus, the mainstream negotiation prices increased gradually.
Third, the price of related products continued going up. In August, the related ABS price increased consecutively. At present, the price of domestic products has increased to RMB 12,500/mt, and the price of imported products has increased to RMB 14,000/mt.
Overall, the demand for PC in August was still weak. The operating rate at sheet and modified industries was fairish, but that in injection industry performed badly. The purchase quantity based on rigid demand was insufficient, so it was hard to drive up the PC market dramatically.
It is expected that China’s PC market will slow down the increasing speed in the short run. The tight supply situation will last until end August, so there will be no supply pressure temporarily. However, the BPA price is showing downtrend, failing to support the PC market from the cost side.
