Asia PC prices slump in the wake of US-China trade tensions

SINGAPORE (ICIS)–Asia polycarbonate (PC) markets are set to stay under downward pressure as renewed trade tensions between the US and China rattle consumer demand.

On display were 8K TVs during the Appliance and Electronics World Expo 2019 in Shanghai, China. (Source: Imaginechina/REX/Shutterstock)

Spot prices of PC on the import front and Chinese domestic markets spiralled down, against a backdrop of adequate supply outpacing demand.

On a CIF (cost and freight) China basis, spot prices of general-purpose (GP) moulding grade PC prices averaged at around $2,085/tonne levels as of 8 May.

Prices declined by some $65/tonne from a month earlier, and 44% lower from year-ago levels when spot prices of the grade stood at above $3,500/tonne CIF China, according to ICIS data.

The slump in PC prices comes even as upstream raw material bisphenol A (BPA) prices firmed slightly averaging at $1,390/tonne CFR (cost and freight) China in the latest week ended 3 May, up by $15/tonne from the preceding week, ICIS data showed.

A narrowing spread between BPA and PC generally points to tighter margins for downstream PC makers.

PC facilities in northeast Asia were mostly running at full capacity or optimum levels, adding to the surplus supply scenario.

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

Spot discussions of GP moulding grade PC softened, coinciding with the imminent imposition of tariffs to be placed on Chinese goods amid fresh trade tensions between US and China.

Cargoes of GP moulding grade PC fetched levels at the low to mid $2,000s/tonne CIF China basis for May delivery, with some northeast Asia suppliers of the grade having scaled down offers to encourage demand.

Chinese domestic PC prices were discussed at yuan (CNY) 15,000-16,000/tonne DEL as of 8 May, falling from the previous week’s CNY 16,000-17,000/tonne DEL range.

Further exacerbating the bearish market sentiment, a plentiful supply scenario is expected to generate downward pressure on spot prices with slim rebound prospects in the short term.

Focus article by Melanie Wee

Click here to view related stories and content on the US-China trade war topic page