04 November 2008 09:48 [Source: ICIS news]
By Jeremiah Chan
SINGAPORE (ICIS news)--Bisphenol-A (BPA) prices in China had their steepest seven-day drop last week, falling by 25-32% due to excess supply, poor demand and crashing domestic prices, market sources said on Tuesday.
BPA prices were assessed at $950-1,050/tonne CFR (cost and freight) NE (northeast) Asia on 31 October on a confirmed deal reported at the lower-end of the price range, according to global chemical markets intelligence service ICIS pricing.
The reported deal represented a startling plunge of $350-410/tonne from previous weeks’ values of $1,360-1,400/tonne CFR NE Asia, and a 40-45% slump over four weeks of consecutive price decreases since early-October.
The 216-tonne bonded-warehouse BPA parcel was reported to have been sold to an epoxy resins manufacturer in eastern ?xml:namespace>
“Now, I will not pay anything above $800/tonne CFR China. There’s still plenty of room for prices to fall further, if nobody’s willing to sell me at this price this week, then I will simply choose to wait,” the procurement manager of the epoxy resins plant told ICIS news in Mandarin.
Some regional sellers pointed out that such price movements were unrealistically rapid, especially in light of the high costs of raw materials procured earlier.
Several regional producers have pointed out that they would rather cut production rates in an attempt to hold prices, rather than offload cargoes at current market levels, which were below their cash costs.
On the other hand, the poor BPA demand/supply fundamentals have accelerated the downward pressure on prices.
BPA demand has been lacklustre in recent months following the reduced operation rates at several downstream epoxy resin plants in
Reduced purchasing power from importers due to difficulties in obtaining letters of credit (LCs) also kept fresh imports at a minimum.
The impending start-up of Shanghai Sinopec Mitsui Chemicals’ (SSMC) 120,000 tonne/year plant in
Plummeting Chinese domestic values – which crashed by yuan (CNY) 1,600-2,000/tonne ($234-292/tonne) in a single week to around CNY8,200-8,300/tonne ex-warehouse on 31 October – were also a key factor behind the plunging US denominated prices, market sources said.
Traders saddled with excess inventories were dumping cargoes in an effort to curb further losses, market sources added.
BPA is a key monomer used in epoxy resins and polycarbonate manufacturing, and major producers in the region include Nan Ya Plastics, LG Chem, Mitsui Chemicals, Kumho P&B and Chang Chun Plastics.
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.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections