Asia BPA demand picks up momentum ahead of holiday

SINGAPORE (ICIS)–Asia bisphenol A (BPA) prices rose on the back of a buying spurt, ahead of regional holidays this week, while supply limitations from plant turnarounds is set to keep prices afloat.

(Source: Valentin Wolf/imageBROKER/REX/Shutterstock)

A string of spot BPA cargo deals came through just before key China markets closed on 1-4 May for the Labour Day holidays.

BPA of northeast Asia origin in cargoes of 300-500 tonnes in size, totalling close to 2,000 tonnes were concluded at $1,330-1,340/tonne CFR (cost & freight) China for May delivery.

The transacted level was viewed by market participants to be in line with the current mainstream market, alongside improved Chinese domestic markets.

Spot BPA prices averaged at $1,390/tonne on a CFR China basis as of 1 May, rising by $30/tonne from the preceding week, ICIS data showed.

Market sentiment was also kept on the boil as there were regional BPA suppliers with limited inventory pressure, with scheduled plant maintenance set to curtail supply.

In the shortened week of assessment, asking levels on the selling side for northeast origin BPA were placed at around $1,350/tonne CFR China and above, while workable levels on the buying side were at around the low $1,300s/tonne CFR China.

South Korean producer Kumho P&B Chemicals is carrying out planned maintenance at its 450,000 tonnes/year BPA plant, which is expected to last for about 30 days from 1 May.

In this regard, there were producers evidently with less selling pressure nor to scale back spot offers.

The surprise uptick in BPA prices came alongside steady upstream phenol prices in the region, helping to widen the spread between both products.

The spread between BPA and phenol prices in China has risen to its highest in the year at above $350/tonne, pointing to healthy economics for BPA makers at the very least.

BPA is used in the production of epoxy resins and polycarbonate, which are used in electronics, automobiles, adhesives and coatings.

On the Chinese domestic front, prices in east China ended at yuan (CNY) 11,300-11,400/tonne EXWH on 1 May, gaining some ground from the previous week’s close at CNY 11,200-11,250/tonne EXWH.

Focus article by Melanie Wee