European BPA output holding up

30 July 2001 00:00  [Source: ICB]

Global bisphenol A (BPA) producers are optimising their European output as exchange rates and energy costs in Europe make production more competitive than in other regions.

However, the two major demand sectors for BPA, polycarbonate and epoxy resins, have seen slowing demand in recent months. A leading BPA producer indicated that demand is comparable to 2000, but that the growth in PC demand of 13-15%/year, seen in recent years, is unlikely to re-emerge next year.

European BPA prices have remained relatively stable. One supplier pointed out that 'integrated PC producers have a vested interest in keeping BPA prices high, as do integrated epoxy producers'. Quarter three prices are not all finalised, but are expected by some to weaken slightly to around DM2.55-2.75/tonne compared with DM2.60-2.80/tonne in quarter two.

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Epoxy markets are supported by the relative weakness of the euro versus the dollar, which has supported European exports.

The US and Asian BPA markets have suffered a dramatic drop in consumption, but Europe has remained protected from competitively priced imports as a result of euro/dollar exchange rates.

BPA had been very short earlier in the year, which sent prices soaring, but now the market is described as balanced to long. Demand is still expected to grow in 2002 and beyond, although not to the extent seen in 2000.

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