FocusAsia BPA falls on weak demand; China in oversupply

30 September 2011 07:11  [Source: ICIS news]

By Liu Xin

SINGAPORE (ICIS)--Bisphenol-A (BPA) spot values in Asia retreated because of abundant supply in the key China market, and prices will likely keep falling amid weak demand from downstream epoxy resins and polycarbonate (PC) sectors, industry sources said on Friday.

BPA prices tumbled by an average of $500/tonne from a record high in early May to $1,980-2,050/tonne (€1,465-1,517/tonne) CFR (cost and freight) China in the week ended 23 September, according to ICIS data.

But China imported huge volumes of BPA in August at 60,595 tonnes, almost double the volume it took in the same period last year, according to official data.

“The record-high import volumes in August and falling feedstock phenol prices have triggered some panic-selling,” a Chinese trader said.

China’s BPA imports in August more than 40% higher than its regular “healthy” monthly intake of 40,000-45,000 tonnes, said another trader.

Amid uncertainty in the price outlook and tight cash flow, Chinese traders cut their prices to offload cargoes.

Chinese domestic prices have plunged by more than yuan (CNY) 1,000/tonne ($156/tonne) week on week to CNY15,600-15,700/tonne EXWH (ex-warehouse) on 30 September, market sources said.

Buying interest for imported material is muted amid the global economic uncertainty. Deals and discussions this week were heard at around $1,900/tonne CFR China, down 6% week on week, market sources said.

Concerns over the weakening global economic conditions, as well as the volatile crude prices, may trigger another round of panic selling of BPA, market sources said.

In China, manufacturing activities are relatively weak, translating to low demand for epoxy and polycarbonate (PC) resins - the two major downstream sectors for BPA, industry sources said.

Buyers from these sectors are keeping to the sidelines as they expect prices to come down further in the coming weeks.

“Trade was slow as end-users are not stocking up BPA for the upcoming National Day holidays,” an eastern China based trader said.

The Chinese market will be closed for the week-long National Day celebration on 1-7 October.

BPA supply, meanwhile, will be boosted as regional facilities either restart operations or ramp up production towards October.

Shanghai Sinopec Mitsui Chemicals (SSMC) resumed full production at its 120,000 tonne/year BPA facility at Caojing after running the plant at 80% of capacity for two weeks, market sources said.

In Taiwan, Nan Ya Plastics is planning to restart its 130,000 tonne/year No 4 BPA line at Mailiao in end-September or early October, but a definite restart date has not been set.

Meanwhile, China’s Kingboard Chemical is planning to restart its 25,000 tonne/year BPA plant at Huizhou city in southern Guangdong province on 1 October after the plant was taken off line on 19 September for a scheduled maintenance.

China’s Bluestar New Chemical Materials restarted its 90,000 tonne/year BPA facility at Nantong, Jiangsu province, on 26 September after completing maintenance at the unit from mid-August. On-spec production is expected to be achieved in early October, a source close to the company said.

($1 = €0.74 / $1 = CNY6.40)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Liu Xin
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