Supply Boosts Consumption, But Demand Contracts—PC Prices Drop in Early June

June 9th News

Price Trend

According to Spotcom data, in early June, the PC market in China saw a significant decline, with spot prices for various grades decreasing considerably. As of June 9th, the benchmark price for PC blends was around 14,633.33 CNY per ton, representing an 8.73% decrease from the beginning of the month.

Reason Analysis

Supply Side: Entering June, the operating rates of China's PC polymerization enterprises have rebounded from a low level. Covestro has recently resumed operations, and Luxi Chemical has increased to three plant loads, with the industry load rising above 65%. Additionally, there are plans for multiple polymer plants to restart, gradually reducing production losses. Currently, the weekly average output is approaching 60,000 tons, and the smoothness of shipments from polymer plants has declined, leading to a weakening in the willingness to hold prices. Overall, the support from the supply side for PC is showing a softening trend.

Regarding Raw Materials: As shown in the chart above, the Chinese Bisphenol A market stabilized after a decline at the beginning of June. International crude oil prices have experienced sharp fluctuations, while the prices of acetone and phenol—key raw materials—have shown mixed trends. On the other hand, following the decline from late last month to early this month, the spot price of Bisphenol A has reached a temporary low. Meanwhile, supply changes remain limited, and demand continues to be weak but driven by essential needs, causing the market to enter a stalemate. Overall, this situation provides only limited support for 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 enclosure shells. End-user enterprises are operating at low utilization rates. Currently, PC prices have fallen from their high levels, and market sentiment is heavily characterized by wait-and-see attitudes. Buyers are cautious about stocking up and show little willingness to build positions. The liquidity of supply has slowed down, with traders adjusting their quotes according to market conditions and increasingly resorting to price reductions to secure orders. Low-priced supplies on the market remain to be absorbed, exerting downward pressure on polymer manufacturers’ pricing benchmarks. Overall, the demand side is providing weak support for PC spot prices.

Future Market Prediction

In early June, the Chinese PC market experienced a significant downturn. The price of upstream bisphenol A fell and then stabilized, making it difficult for cost values to support PC. The operating rates of Chinese PC polymerization plants were adjusted upwards from low levels, with expectations of further supply relaxation in the future. Trading within the market was mainly driven by weak rigid demand, with buyers chasing rallies and selling off, being cautious in stocking up, and mostly engaging in small transactions. Currently, with increased supply and weak demand, the market sentiment is negative, and it is expected that the market will continue to trend weakly in the short term.

Technical Analysis

Analysts believe that according to SpotCom, on June 1st, the 10-day moving average of PC crossed below the 20-day moving average. The auxiliary indicators show that the PC price is at a recent low and a distant medium level in the five-tier system. The difference between the averages is showing a trend of negative expansion, indicating a short-term downward trend, with significant resistance to an increase in the spot price. It is recommended to closely monitor the fundamental situation of PC for future market trends.