FocusBPA slumps on downstream weaknesses

10 October 2008 04:59  [Source: ICIS news]

By Jeremiah Chan

 

SINGAPORE (ICIS news)--Earlier hopes that the key Chinese bisphenol-A (BPA) industry could stage a post-Golden week rebound came to naught, as sentiments continued to suffer on weaknesses in downstream demand, market sources said on Friday.

 

“It’s no longer a matter [of] lowering prices anymore,” the marketing manager of a major Taiwanese BPA manufacturer said in Mandarin, pointing out that buyers had lost interest in placing their bids for October cargoes on waning demand from the downstream epoxy resin and polycarbonate sectors.

 

Domestic prices in China plunged this week, as traders saddled with earlier imported cargoes, eagerly offloaded their materials in a bid to cut losses due to the continued downturn in prices.

 

Fixtures were heard at yuan (CNY) 14,600/tonne ($2,141/tonne) ex-warehouse on Monday but had fallen to levels as low as CNY13,800/tonne ex-warehouse by Friday morning.

 

"We are worried that traders who have to dump cargoes at low prices in a last resort to get cash will go bankrupt," a Shanghai-based Japanese trader said, pointing out that the credit crunch was causing financing difficulties among several local businesses.

                                                                                                          

Other end-users echoed the sentiment, with most pointing out that the dismal outlook coupled with the financial bloodbaths kept buying interest at bay, and that they were completely uninterested in topping up inventory levels.

 

“We are not interested in importing any cargoes, downstream demand is so weak, and we all feel that prices will drop further,” the procurement manager of a epoxy resins factory located in south China said in Mandarin.

 

Meanwhile, various regional BPA producers, faced with growing inventory levels on slackening demand, are opting to reduce their operation rates rather than keep up production and sell their cargoes below cost.

 

Major BPA makers in Asia include Nan Ya Plastics, Mitsui Chemicals, LG Chem and Kumho P&B.

 

JennyYi from CBI contributed to this article

 

($1 = CNY 6.82)

 

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By: Jeremiah Chan
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