Both Supply and Demand Weak, PCs in Volatile Operation Mid-May

May 20th News

Price Trend

According to Spotcom data, in mid-May, the Chinese PC market showed a narrow fluctuation, with spot prices for various grades rising and falling. As of May 20th, the benchmark price for PC blends was around 16,366.67 CNY/ton, representing a 0.20% increase from the beginning of the month.

Reason Analysis

Supply side: In mid-May, the operating rates of China's PC polymerization enterprises were further reduced. Maintenance plans for companies such as Shanghai Mitsubishi and Zhejiang Petrochemical were successively carried out, resulting in a 7% decrease in industry load to around 67%, reaching a new low for the year. The loss in production continued to expand, with the current weekly average output falling below 60,000 tons. Polymer plants faced low shipment pressure and had a strong intention to maintain prices. Overall, the supply side continues to provide stronger support for PC.

Regarding Raw Materials: As shown in the chart above, the Chinese bisphenol A market has also been experiencing volatile fluctuations since mid-May. Although international crude oil prices rebounded after a decline, the upward momentum failed to translate effectively downward, resulting in only very limited price increases for acetone and phenol. Consequently, this has provided only modest support for BPA prices in China. On the other hand, while BPA supply changes have remained limited, demand continues to weaken. Merchants are actively selling off their inventories, and in practice, they tend to offer discounts to secure orders. Within this price range, prices initially stabilized before eventually declining, overall weakening their supportive effect on PC costs.

Demand Side: Sales at downstream PC factories are gradually entering the off-season, leading to a softening in demand for products such as board and shell casings. End-user enterprises are operating at low capacity utilization levels. Currently, PC prices remain high, prompting buyers to adopt a cautious approach to inventory building. There is little willingness to establish new positions, and the market is characterized by a strong wait-and-see attitude. Supply liquidity is relatively sluggish, and traders’ sentiment is weak; price quotations are following market trends, with increased instances of offering discounts to secure orders. Low-priced supplies on the market still need to be absorbed, exerting downward pressure on polymer manufacturers’ pricing focus. Overall, the demand side is providing insufficient support for PC spot prices.

Future Market Prediction

In mid-May, the Chinese PC market maintained a high-level consolidation. The upstream bisphenol A prices were slightly weak, providing only moderate support to PC in terms of cost. The operating rates of Chinese PC polymerization plants continued to decrease slightly. Trading within the market was mainly driven by weak rigid demand, with buyers being cautious and purchasing on a need-to-use basis, leading to mostly small transactions. Currently, both supply and demand for PC are weak, and the market direction is unclear. It is expected that the market will continue to consolidate in the short term.

Technical Analysis

Analysts believe that according to SpotCom, on May 16th, the 10-day moving average of PC crossed below the 20-day moving average. Supporting indicators show that the PC price is at a high or moderately high level across all five tiers, and it is in an overbought warning position within 10 days. However, the recent average difference has shown a fluctuating trend, indicating that in the short term, the market is consolidating at a high level, with significant resistance to increases in the spot price. It is recommended to closely monitor the fundamental situation of PC for future market trends.