Raw Material Strength and Weak Demand Lead to PC Fluctuations in January in China

February 2nd, according to news

Price Trend

According to the bulk commodity list data, in January, the Chinese PC market experienced fluctuating conditions, with spot prices for most grades showing mixed increases and decreases. As of January 31, the benchmark price for mixed PC was around 12,966.67 CNY/ton, representing a change rate of -1.77% compared to the beginning of the month.

Reason Analysis

Supply side: Since January, the overall load of China's PC polymerization enterprises has seen a slight increase. Zhejiang Petrochemical's second line was restarted on January 23, and the overall average operating rate in the industry has rebounded by 3% to 81.5%, with a weekly average production of over 65,000 tons. As social inventory was somewhat digested mid-month, the sales and production pressure on polymerization plants is manageable. Overall, the supply side provides moderate support for PC.

Regarding Raw Materials: As shown in the chart above, China’s Bisphenol A market gradually picked up momentum in January, with price increases concentrated toward the end of the month. At the beginning of the month, supply tightened while demand showed marginal improvement. Meanwhile, phenol and acetone prices followed crude oil trends, continuing their upward trajectory and strengthening cost support. Driven by the cumulative effect of multiple positive factors, market prices rose steadily, traders displayed strong willingness to hold prices, and overall trading sentiment significantly warmed up. This provided solid bottom-support for PC costs.

Demand Side: Although the profitability of end-user companies has improved only marginally, downstream PC factories still face less-than-ideal operating rates. The concentrated delivery of contracted orders from the first half of the month has gradually come to an end, and the localized tightness in supply toward the end of the month has eased somewhat. However, after prices rose, buyers have become more cautious about restocking, and their willingness to build inventories ahead of the holiday season is weak. Under the cover of concerted price-support efforts by polymer processors, merchants have increasingly resorted to offering discounts to facilitate sales at month-end. Overall, the demand side’s supporting influence on PC spot prices has been strong initially but has since weakened.

Future Market Forecast

In January, the Chinese PC market experienced fluctuations with a decline. The upstream bisphenol A market was active, providing moderate cost support to PC. The operating rates of Chinese PC polymerization plants were largely stable with a slight increase, indicating a trend towards a more relaxed supply situation. Trading sentiment in the market has returned to caution, and it is expected that the PC market may continue to consolidate in the short term.