Asia BPA hits 22-month low on economic turmoil

17 October 2008 10:23  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian bisphenol A (BPA) prices have fallen to their lowest level in 22 months and are poised to drop further in line with crashing crude oil values, turmoil in the global economic markets and weakening supply-demand fundamentals, market sources said on Friday.

Earlier this week, bonded warehouse fixtures were reported by traders to downstream end-users in the epoxy resins industry at around $1,520-1,550/tonne ex-bonded warehouse, representing a $130-150/tonne drop from discussions heard the previous week.

Prices were assessed at $1,650-1,700/tonne CFR (cost and freight) NE (northeast) Asia last Friday - the lowest level since December 2006, according to global chemical market intelligence service ICIS pricing.

“One of our customers, an epoxy resin manufacturer in China, asked us if we were interested in buying up their BPA inventories,” one trader said, as the bearish outlook resulted in market players anxiously attempting to clear their inventories.

Chinese domestic BPA has plummeted yuan (CNY) 1,300-1,500/tonne ($190-220/tonne) since Monday, as importers, traders and even end-users dumped their product in the market in a bid to cut their losses before prices fell further.

BPA prices in eastern China were reported at about CNY12,500/tonne ex-warehouse, with several market constituents pointing out that domestic prices were set to fall further in the coming weeks.

“The main issue now is not with the price - it’s just that there’s no demand,” one major seller lamented

He added that the surge of imports into China two months ago continued to weigh on prices.

Most epoxy resin manufacturers in China were also uninterested in procurement, pointing out that lacklustre downstream demand due to the credit crunch in Western nations had resulted in slashed operation rates.

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

($1 = CNY6.83)

Jenny Yi contributed to this article
For more on BPA visit ICIS chemical intelligence
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By: Jeremiah Chan
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