02 December 2008 10:17 [Source: ICIS news]
By Jeremiah Chan
SINGAPORE (ICIS news)--A sudden fall in October bisphenol A (BPA) import volumes into the key China market has underpinned a limited, $10/tonne increase in spot prices, market sources said on Tuesday.
Statistics released by the Chinese customs last week showed a total of 28,869 tonnes of BPA imported in October 2008, 28% lower year on year and a drop of 17% from September quantities.
BPA prices edged $10/tonne higher to $870-920/tonne (€692-732/tonne) CFR (cost and freight) NE (northeast) Asia during the week ended 28 November, according to global chemical market intelligence service ICIS pricing.
Market sources attributed the rebound in BPA values to improved buying sentiment from traders who were eager to top up their dwindling inventories after the reduced import quantity in the previous month.?xml:namespace>
The sharp decline in BPA imports was not a surprise considering the recent lacklustre demand and a slowdown in downstream demand especially from the epoxy resin and polycarbonate industries, market players said.
Several downstream end-users had also reportedly deferred their purchasing requirements amid the earlier downturn in prices confident that prices had not bottomed out.
"I predict prices will drop to $700/tonne [CFR China], so why should I buy any material now?" the purchasing manager of a major epoxy resins plant located in southern China said in Mandarin
The impending start-up of Shanghai Sinopec Mitsui Chemical’s new 120,000 tonne/year BPA plant in China would push prices down further, he added.
As a result, this dearth of purchasing activity led to end-users only consuming domestic inventories on a back-to-back basis, with buying interest in fresh fixtures limited due to the rapid drop in prices.
Consequently, several traders pointed out that the current domestic inventories in the key China market had been steadily reducing in recent weeks, especially with regional producers cutting their operating rates due to poor demand.
"Demand has not really picked up, but at least there is no longer any urgency to sell," one major China based trader said in Mandarin
If import volumes continued to remain dismal, BPA prices could stage a temporary rebound in subsequent weeks, the trader added.
($1 = €0.79)
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