21 July 2003 00:00 [Source: ICB]Poor polycarbonate markets worldwide have hit bisphenol A (BPA) producers. As yet there is no indication of any improvement in market conditions in quarter three, say suppliers.
BPA numbers rose on average by E100/tonne in quarter two. However, they have already lost more ground than was gained, falling back down by as much as E150/tonne by early quarter three to an average level of E950-1000/tonne FD.
BPA producers complain that a 'stagnating' European polycarbonate market, which has led to capacity cutbacks, has dealt them a severe blow in volume terms. The situation in Asia has been even more dramatic, with the Sars (severe acute respiratory syndrome) outbreak stifling demand through much of the second quarter.
The other key BPA derivative sector, epoxy resins, has also been underperforming, although not as dramatically as the polycarbonate sector. BPA producers say there is no sign of an upturn in demand into epoxy resins in quarter three in Europe, although Asian markets appear to be more positive regarding prospects for the third quarter.
BPA pricing has also come under pressure from falling raw materials, principally benzene. The huge drop in the third quarter benzene contract price is weighing on the BPA market. Benzene crashed down E209/ tonne from quarter two to settle at E316/tonne.
Producers note that quarter two's high feedstock costs severely cut into margins, despite the successful round of BPA price hikes.
From a margin perspective, producers say they are in a better position in quarter three, since the massive drop in raw materials costs has given some relief, despite the subsequent drop in BPA prices.
Buyers have also benefited from BPA producers' attempts to hold on to existing market share by slashing prices.
With the likelihood of a lean summer period, producers are focusing attention on the prospects for September. 'If September demand is good the signs for the fourth quarter are positive, but if its bad, we're in trouble,' commented a BPA supplier.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
Sample issue >>
My Account/Renew >>
Register for online access >>
|ICIS Top 100 Chemical Companies|
|Download the listing here >>|
Asian Chemical Connections