Cost Pulls Up March PC Market Performance

April 1st bulletin

Price Trend

According to the bulk commodity list data, in March, the PC market in China experienced a rapid price increase, with spot prices for most grades rising significantly. As of March 31, the mixed benchmark price for PC was around 16,516.67 CNY/ton, representing a 26.79% increase from the beginning of the month.

Reason Analysis

Supply Side: Since March, China's PC polymerization companies have seen a mix of restarts and maintenance. Earlier, Hainan Huasheng's plant load increased; mid-month, Dafeng Jiangning's single line was temporarily shut down, and Gan Ning Petrochemical fully halted operations; by the end of the month, Zhejiang Petrochemical resumed operations. Overall, the load changes within this period were relatively narrow, with the average operating rate fluctuating around 87%. Weekly production at the end of the month exceeded 70,000 tons. Although the load is relatively high, there are maintenance plans for Cangzhou Dahua and Covestro in early April, which could lead to a reduction in supply. In summary, the supply side provides moderate support for PC.

In terms of raw materials: As can be seen from the chart above, there has been a significant increase in the price of bisphenol A in the Chinese market since early March. Affected by the sharp fluctuations in international crude oil prices, the prices of phenol and acetone have also fluctuated in tandem. This, in turn, has driven up the spot price of bisphenol A in China. At the same time, the increase in the supply of bisphenol A within the month was limited. As crude oil prices continued to rise towards the end of the month, there is still room for further increases in the price of bisphenol A. This trend is supportive of the cost value of polycarbonate (PC).

Demand Side: The profitability of end-user companies has shown only limited improvement, and downstream PC factories remain at generally moderate operating levels. Currently, PC prices have risen to relatively high levels, prompting buyers to adopt a more cautious approach to inventory building and reducing their willingness to further increase stockpiles, thus entering a wait-and-see phase. Meanwhile, international crude oil prices continue to fluctuate and push up petrochemical industry costs and logistics expenses, simultaneously driving a synchronized rise in bulk commodity prices. Although the speculative hype in the PC market earlier has somewhat subsided, traders currently maintain a relatively strong sentiment and are attempting to quote higher prices. Overall, the demand side provides only moderate support for PC spot prices.

Future Market Forecast

In March, the Chinese PC market experienced a consolidation after a rise. Affected by ongoing geopolitical situations, crude oil and related petrochemical products fluctuated at high levels, with upstream bisphenol A prices peaking and adjusting, and cost values being simultaneously transmitted to PC. The operating rates of Chinese PC polymerization plants remained largely stable with minor adjustments, and there is an expectation of further supply tightening due to concentrated maintenance in the industry. Trading within the market was mainly driven by rigid demand, with buyers being cautious and purchasing as needed, resulting in small-scale transactions at the end of the month. It is expected that in the short term, the PC market may be influenced by both the leading increase in upstream costs and the tightening of supply, potentially leading to a steady upward trend.