August 31 news
Price Performance
In August, the price of bisphenol A in China surged and then declined, showing an overall downward trend. At the beginning of the month, the spot negotiation price in East China was around 9,700-9,750 CNY/ton. By mid-month, the price weakened rapidly, and during the second half of the month, it fluctuated at a low level. By the end of the month, the main transaction price range was 9,200-9,350 CNY/ton. The price decreased by about 300-400 CNY/ton for the entire month. High-priced transactions were weak, and the market shifted from holding prices to a game of offloading inventory.
1. Demand is in the off-season, with insufficient downstream uptake (the most critical pressure)
1）Epoxy resins: During the traditional low season for coatings and flooring in July and August, the operating rate of solid epoxy is only 40-45%, while that of liquid epoxy is 60-65%. Downstream orders for coatings, infrastructure, and real estate are weak, leading to losses for resin companies. They are only replenishing inventory based on essential needs and refusing to purchase at high prices.
2）PC Polycarbonate: The production facilities are operating at a reasonable level, but the end consumption by the home appliance and sheet industries is flat. PC's own profit margins are being squeezed, and buyers are maintaining low inventory levels, with no proactive stockpiling.
3）The overall purchasing logic has shifted to buying as needed, with intermediaries unwilling to build up inventory. High-priced goods are facing circulation difficulties, and suppliers are offering discounts to sell their stocks.
2. Supply-side pressure marginally increases, with limited support from maintenance.
In August, the supply contraction caused by the concentrated load reduction and maintenance in July gradually eased, with some phenol and acetone, as well as bisphenol A plants, resuming operations. The industry's operating rate has slightly recovered from a low level to the 65-70% range. Although individual facilities (such as Fuyu Petrochemical) scheduled short-term maintenance in August, providing some temporary benefits, the reduction in output is insufficient to offset the overall weakness during the off-season. The continuous supply of imported goods at ports to the East China market increases the available supply.
3. Cost support loosens, industrial chain losses spread
In the early part of the month, upstream phenol briefly surged but began to decline in the middle of the month. Both benzene and acetone lacked the momentum for a sustained increase, weakening the cost support for bisphenol A. The processing spread for bisphenol A has been negative for a long time, keeping the industry in a loss-making state: once the upstream raw materials weaken, bisphenol A loses its price support. At the same time, the negative feedback loop of "cost increase → downstream not following the rise → forcing raw material prices to fall back" has formed, according to Sina Finance.
4. Market Sentiment and Trading Aspects
At the beginning of the month, there was a short-term bullish sentiment in the market due to expectations of production cuts from maintenance. However, after prices rose, transactions quickly shrank, and traders shifted from holding back sales to selling off their inventory. By October 20th, the daily price difference turned from being strong to stagnant and bearish, with a lack of buying interest at high levels, causing prices to come under pressure and decline.
Typical contradictions in August: Phased recovery of supply + traditional demand off-season + fluctuating cost support + disrupted downstream profit transmission. Although factories, facing losses, are willing to hold prices, the end market lacks orders to absorb higher prices, resulting in a weak, oscillating market characterized by “difficulty in raising prices despite willingness, and easy declines with hard-to-recover rebounds.”
Future Market Prediction
1) The fulfillment of the traditional peak season for downstream coatings and electronics industries in September; 2) Phenol-acetone raw material fluctuations and Chinese plant maintenance/restart plans; 3) The arrival volume at ports and the pace of inventory accumulation; 4) Changes in the operating rates of epoxy resins and PC plants.
