According to data from SunSirs Commodity Markets, the domestic PC market consolidated after a decline in July, with spot prices for some brands declining. As of July 31st, SunSirs Markets' benchmark PC price was around 14,333.33 RMB/ton, a -0.92% change compared to the beginning of July.
Analysis of the Causes
Supply: Since July, domestic PC aggregate manufacturers have seen a rebound in capacity after a decline. At the beginning of the month, Sichuan Tianhua and Shengtong JuRMB announced maintenance plans, followed by Pingmei Shenma in mid-month. During this period, six production lines were shut down. Most of these shutdowns were short-term, with full capacity restored in the second half of the month. By the end of the month, the average industry operating rate had returned to 77% of the beginning of the month, with average weekly output approaching 65,000 tons. With ample supply on the market and high inventories remaining stubbornly high, the ample PC supply remains unchanged. Furthermore, with fewer announcements of maintenance plans in the later stages of the market, continued shipment pressures have weakened the supply side of the market, providing little support for PC prices.
Raw materials: As shown in the above chart, bisphenol A prices fell in July before trading sideways. Upstream acetone and phenol also fluctuated at low levels in the first half of the month, dragging down spot prices. Although raw materials showed a rebound at the end of the month, bisphenol A was also affected by supply-demand imbalances, resulting in weak demand and a lack of upward momentum in the market. Overall, the bisphenol A market provided little support for PC costs during the ten-day period. However, PC prices are currently at historically low levels, and the easing of cost pressures has provided some room for maneuver.
Demand: This is traditionally the off-season for PC, and downstream PC factories are operating at lower capacity. Due to long-term weak market momentum, high inventories and an oversupply of on-site goods, the supply-demand imbalance has not improved. Currently, end-users are cautious about placing new orders and are reluctant to purchase high-priced goods. Merchants are facing increasing financial pressures, leading to an increase in profit-taking on existing orders. On-site supply is sluggish, and trading continues to be dominated by contract deliveries. Overall, demand is providing little support for PC spot prices.
Market Forecast
The domestic PC market saw a narrow decline in July. The upstream bisphenol A market stabilized after a decline, providing moderate support for PC costs. Raw material discounts have kept industry operating rates high. Domestic PC polymerization plant loads have rebounded after a decline, maintaining a strong supply structure. Downstream demand is clearly characterized by a low season, making it difficult to see positive market conditions. Industry players are adopting a wait-and-see approach to the market outlook. We expect the PC market to continue searching for a bottom, but PC prices are already at historical lows, so further declines are likely to be limited.
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