Upstream Decline & Lackluster Trading Activity: April PC Prices Fall from High Levels

May 1st News

Price Trend

According to SpotCom data, the China PC market saw a decline in April, with the spot prices of most grades generally decreasing. As of April 30, the benchmark price for PC blends was around 16,200 CNY/ton, representing a 2.11% decrease from the beginning of the month.

Reason Analysis

Supply Side: Since April, maintenance of PC polymerization enterprises in China has been relatively concentrated. Previously, the operating rate of Zhejiang Petrochemical increased, while Luxi Petrochemical had a temporary shutdown of one line. In the middle of the month, KengChuang's scheduled maintenance was carried out, and Chi Mei Zhangzhou implemented technical renovation tasks. Overall, the load within the month has decreased by more than 15%, with the current average operating rate around 70%, resulting in a significant loss in production. Currently, the weekly average production has dropped to less than 60,000 tons. After the holiday, there are still some delayed maintenance plans to be carried out, indicating further potential for supply contraction. In summary, the supply side provides moderate support for PC.

Regarding Raw Materials: As shown in the chart above, the Chinese bisphenol A market has been gradually declining since early April. Affected by the sharp drop in international crude oil prices, phenol and acetone markets have stalled and fallen, thereby dragging down the price center of bisphenol A in China. Meanwhile, supply changes for bisphenol A remain limited, while demand has softened. As a result, traders are actively selling off their inventories and tend to lower prices to secure orders. Overall, this has weakened the support for polycarbonate (PC) costs.

Demand Side: Terminal enterprises’ profitability remains unchanged, and downstream PC factories continue to operate at relatively low capacity utilization levels. Although current PC prices have fallen from their highs, they still remain in the upper range of the past three-year peak. Buyers have become more cautious about restocking and show little willingness to build inventories. Pre-holiday inventory still needs to be cleared, market sentiment is heavily characterized by wait-and-see attitudes, and liquidity in the supply chain has declined. The earlier speculative surge in the PC market has largely subsided, causing sellers’ confidence to wane; quotes are now following market trends, and there’s an increasing tendency for merchants to offer discounts and close deals at reduced prices. Overall, demand-side support for PC spot prices remains weak.

Future Market Forecast

In April, the Chinese PC market was stable in the first half of the month and fell from a high position in the second half. The price of upstream bisphenol A continued to weaken, dragging down the cost value of PC. The operating rate of Chinese PC polymerization plants was slightly reduced, but the supply-side benefits were limited. The transactions in the market were mainly driven by weak rigid demand, with buyers being cautious, purchasing as needed, and most transactions were in small volumes. It is expected that in the short term, the PC market may continue to be suppressed by the decline in the far-end upstream, and there may still be room for downward adjustment.

Technical Analysis

Analysts believe that according to SpotCom, on April 18th, the 10-day moving average of PC crossed below the 20-day moving average, and the negative mean difference in the late part of the month showed an expanding trend. Supporting indicators show that the 5 price levels of PC are all at recent lows and further out highs. It is judged that there is significant resistance to a short-term rise in spot prices, and it is recommended to closely monitor international crude oil and Middle East shipping conditions after the holiday.