Asia BPA may extend losses as China import demand softens

Focus article by Melanie Wee

SINGAPORE (ICIS)–Spot bisphenol A (BPA) prices in Asia may fall further in the near term as regional supply is rising amid reduced import demand from the key China market, industry sources said on Tuesday.

On 22 May, spot BPA prices were assessed at $1,250-1,400/tonne CFR (cost and freight) China basis, down by $30-50/tonne from the previous week, according to ICIS data.

Some offers have slipped below $1,300/tonne CFR (cost and freight) China for June delivery from the low-$1,300/tonne CFR China levels in mid-May, possibly indicating a “buyers’ market”, a northeast Asian trader said.

Prices have declined over the past two consecutive weeks after rising for most of the first quarter, the data showed.

The downtrend in spot prices of BPA may continue in the short term amid limited supporting market factors, a northeast Asia-based trader said.

Spot supply of BPA has been increasing as regional plants resume operations after completing turnarounds, market sources said.

Growing inventories and receding import demand in China have been exerting pressure on spot BPA prices.

At an average of $1,325/tonne CFR China basis, BPA prices are currently at their lowest since 23 January. Average spot BPA prices hit an all-time low of $1,145/tonne CFR China on 19 December 2014, ICIS data showed.

A northeast Asia-based BPA supplier is shifting its focus away from China to other alternative outlets, like Europe or the US, where market conditions might be more favourable, market sources said.

On 22 May, Chinese domestic BPA prices were assessed at yuan (CNY) 9,400-9,500/tonne ($1,516-1,532/tonne) EXWH (ex-warehouse), down by 8.3% from 24 April, according to ICIS data.

On the supply side, majority of BPA plants in Asia are operating at full capacity, having recently completed planned turnarounds over the past month.

In South Korea, LG Chem’s 150,000 tonne/year BPA plant in Daesan is running at full capacity, as is its 300,000 tonne/year facility in Yeosu, a company source said.

Its Daesan plant had a scheduled turnaround in March.

In Taiwan, Nan Ya Plastics is also operating at full tilt its four BPA lines that have a combined nameplate capacity of 420,000 tonne/year in Mailiao, a source close to the company said.

Planned maintenance works were completed at the firm’s 150,000 tonne/year BPA No 4 line in April.

In Thailand, PTT Phenol restarted its 150,000 tonne/year plant in Map Ta Phut over the weekend, following a planned turnaround from early May, a source close to the company said.

Volatility in the upstream benzene market is being closely monitored as this could influence BPA prices, a northeast Asian BPA producer said.

BPA is used in the production of engineering plastics resins like polycarbonate (PC).

($1 = CNY6.20)

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