Asia spot BPA faces liquidity shortage on China buy-sell gap

22 May 2009 12:15  [Source: ICIS news]

SINGAPORE (ICIS news)--The Asian bisphenol A (BPA) spot market is facing a liquidity shortage due to tight supply and weak buying interest from the key China market, market sources said on Friday.

"BPA producers in Taiwan, Japan and Korea are all not willing to lower their prices due to the tight inventory situation," a major BPA trader said.

With offers mostly above $1,200/tonne (€864/tonne) CFR (cost and freight) China and bids from epoxy resin manufacturers largely capped at $150/tonne lower, no spot trading has been reported over that past few weeks.

"I think Chinese inventories are enough to last at least until June," a source from Asia’s largest spot BPA seller, Nan Ya Plastics, said in Mandarin.

"March import volumes in to China were very high, and I think April imports are not going to be any less," the source said, adding that the resistance from buyers was due to healthy stockpiles with traders and end-users.

Some market sources had earlier speculated that the disagreement in price discussions could end by this week, with sellers reducing offers due to inventory pressure. However, this was not the case.

Healthier-than-expected demand from the polycarbonate industries in Asia, as well as the recent volatility in feedstock benzene and propylene prices, resulted in an uncertain outlook from buyers and kept traded volumes muted, sources said.

"For the whole month, I feel like I am on vacation," said a sales executive with an Asian BPA major producer.

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

($1 = €0.72)

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By: Jeremiah Chan
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