Asia BPA prices buoyed up by import buying activity

30 August 2016 03:20 Source:ICIS News

Mineral water plastic bottles - 30 August 2016

SINGAPORE (ICIS)--Asia’s spot prices of bisphenol A (BPA) climbed to a new three-month high, underpinned by import buying activity amid limited availability of spot cargoes going into September, industry sources said on Tuesday.

On 26 August, spot BPA prices averaged at $1,125/tonne CFR (cost and freight) China, up by $5/tonne from the previous week to levels not seen since late May, according to ICIS data.

Pockets of import demand buoyed up market sentiment, helping to soak up regional supply.

A couple of BPA spot parcels for September delivery changed hands last week at the high-$1,000/tonne CFR China levels.

“The upward trend [in prices] is expected to be sustained in the first half of September with the G20 Summit,” a northeast Asia-based market source said.

China will host the G20 Summit for the first time in Hangzhou City in Zhejiang province on 4-5 September.

Spot BPA supply is expected to be curbed as petrochemical plants in the surrounding areas in eastern China were mandated by local governments to either shut operations or reduce production in the weeks leading to the summit.

The mandated shutdowns are part of environmental measures to ensure air quality standards are met.

Meanwhile, several BPA plants in Asia are running at below-optimum levels, limiting spot supply availability. Buying interest downstream – particularly in the epoxy resins sector in northeast Asia – was characterised as lacklustre.

In Taiwan, Nan Ya Plastics is running its BPA plant in Mailiao at about 50% of capacity, as it carries out regular partial maintenance. The turnaround affecting two out of four lines at the facility with a total combined capacity of 440,000 tonnes/year is expected to last until the second half of September.

In South Korea, Kumho P&B Chemicals is running its two BPA lines in Yeosu with a combined capacity of 300,000 tonnes/year at an average rate of around 70%, a level it plans to maintain for now.

Industry players are cautiously optimistic in the near term for the BPA market, expecting prices to increase but gains will likely be limited by subdued epoxy resins demand.

“An uptrend in spot prices is possible [in the near term] … although after the G20 [summit], the market might soften,” a China-based market source said, citing increased availability of supply when the plants resume normal operations.

Meanwhile, some market players were taking a wait-and-see stance on the market, monitoring any potential influence from volatility in upstream benzene and phenol markets before taking firm positions.

Chinese domestic prices of BPA have also chalked up gains in recent weeks, reflecting the strength in the regional markets.

On 26 August, east China BPA prices stood at yuan (CNY) 9,400-9,450/tonne EXWH  (ex-warehouse), up by an average of CNY225/tonne from the previous week, and about 7% higher from a month ago, according to ICIS data.

Focus article by Melanie Wee

BPA CFR China 29 August 2016

($1 = CNY6.67)

Picture: Bisphenol A (BPA) is used in the production of polycarbonate (PC), which goes into plastic water bottles.

By Melanie Wee