Supply Contraction Meets Weak Consumption—PCs Consolidate in Early May

May 11th News

Price Trend

According to Spotcom data, in early May, the Chinese PC market showed a mixed trend, with spot prices for some grades fluctuating. As of May 10th, the benchmark price for PC blends was around 16,233.33 CNY/ton, representing a 0.61% decrease from the beginning of the month.

Reason Analysis

Supply side: In early May, the operating rates of China's PC polymer enterprises were still adjusted downward. During this period, Cangzhou Dahua was completely shut down for maintenance, with the industry load at around 74%. There are still maintenance plans for companies such as Shanghai Mitsubishi and Zhejiang Petrochemical, which are expected to lead to an increase in production losses. Currently, the weekly average production is over 60,000 tons, and overall, the supply side provides moderate support for PC.

Regarding Raw Materials: As shown in the chart above, the Chinese bisphenol A market continued its low-level consolidation trend at the end of May, following the pattern observed at the end of last month. The downward pressure on Chinese BPA prices was driven by fluctuations in international crude oil prices and a decline in phenol market conditions. Meanwhile, supply changes for BPA remain limited, while demand continues to weaken. As a result, traders are actively pushing for sales and tend to adopt a strategy of offering discounts to secure orders. Overall, this has weakened the support for PC costs.

Demand Side: As the profitability of end-user companies remains unchanged, the transmission of high spot prices for PCs has been hindered. Downstream PC factories continue to operate at relatively low capacity utilization levels. Although PC prices have fallen from their previous highs, they still remain within the highest range seen over the past three years. Buyers have become more cautious in replenishing inventories and show little willingness to build up positions. Pre-holiday inventory still needs to be cleared, resulting in a strong wait-and-see atmosphere in the market and sluggish liquidity in supply sources. Market participants lack confidence, and pricing is largely driven by market conditions; there’s an increasing tendency for sellers to offer discounts and close deals at reduced prices. Overall, demand-side support for PC spot prices remains weak.

Future Market Forecast

In early May, the Chinese PC market remained at a high level with some consolidation. The price of upstream bisphenol A was slightly weak, providing only moderate support to PC costs. The operating rates of Chinese PC polymerization plants were slightly reduced, and although further declines are expected, the benefits on the supply side are limited. Trading within the market was mainly driven by weak rigid demand, with buyers being cautious, purchasing as needed, and transactions mostly involving small orders. It is expected that in the short term, the PC market will continue to be suppressed by fluctuations in cost values, and there may still be room for downward adjustments.

Technical Analysis

Analysts believe that according to SpotCom, on May 6th, the 10-day moving average of PC crossed above the 20-day moving average, but the recent average difference has shown a fluctuating trend. Additionally, the auxiliary indicators show that the PC price at the 5 levels is at a recent low and a distant high. It is judged that in the short term, the market is in a high-level consolidation phase, with significant resistance to spot price increases. It is recommended to closely monitor the fundamental situation of PC in the future.