price trend
According to the bulk ranking data from Shengyi Society, the domestic PC market fluctuated and fell at the end of August, with most spot prices of certain brands experiencing narrow price reductions. As of August 26th, the mixed benchmark price of Business Society PC is around 14266.67 yuan/ton, with a price increase or decrease of -0.47% compared to early August.
Root cause analysis
On the supply side: As we enter late August, domestic PC aggregation enterprises are experiencing high and stable loads with small fluctuations. Recently, only some of Wanhua Chemical’s facilities have been scheduled for rotating rest and parking. In the first half of the month, the industry’s average operating level remained stable at around 82%. The average weekly output is close to 69000 tons, and the on-site supply is abundant. In terms of inventory, there is a high-level stalemate, and the pattern of abundant PC supply remains unchanged. The shipment pressure of the aggregation plant remains unchanged, and the market supply side has poor support for PC prices.
In terms of raw materials, it can be seen from the above chart that bisphenol A consolidated at a low level at the end of August. Upstream phenol acetone rises and levels, with limited boost to bisphenol A. On the other hand, the supply of bisphenol A is still in a loose pattern, while the weak demand has not changed, and the market lacks upward momentum. Overall, the downward potential of bisphenol A market in the future may not be significant, but it does not provide strong support for PC costs.
In terms of demand: Currently, PC is at the junction of traditional off-season and peak season, but downstream factory loads have not rebounded, inventory remains at a weak level of rigid demand, and there has been no early warehouse construction operation. Due to the long-term weak market dynamics in the industry, high social inventory, and abundant on-site supply, it is difficult to improve the supply-demand contradiction within the range. In addition, with weak foreign trade orders, terminal enterprises are under pressure and are resistant to high priced sources of goods. On the other hand, the financial pressure on traders has increased synchronously, and there has been an increase in the practice of offering discounts and taking orders. The circulation speed of on-site goods is slow, and the trading performance continues to be dominated by contract delivery. Overall, the demand side has weak support for PC spot prices.
Future forecast
At the end of August, the domestic PC market fluctuated and weakened. The upstream bisphenol A market remains weak, providing little support for the cost value of PC. The load of domestic PC aggregation plants is generally stable, and the pattern of strong supply remains unchanged. Downstream demand has not shown any improvement, and the characteristics of the off-season remain unchanged. It is difficult to see any positive market trends, and industry players are adopting a wait-and-see attitude towards the future market. The current PC price is at a historical low, but the market momentum is unlikely to improve in the short term. It is expected that the PC market will continue to search for a bottom in the future.