Asia PC tumbles to near 10-year low on supply glut

Source: ICIS News

2019/05/29

SINGAPORE (ICIS)--Asia’s polycarbonate (PC) markets have slumped to record lows in nearly a decade, pummeled by a plentiful supply situation that could persist amid the ongoing US-China trade war.

Rows of plastic water bottles. (Source: PhotoAlto/REX/Shutterstock)

Spot PC prices extended their downward trend due to the supply overhang, while demand was dwindling, particularly for imports in the key China market.

Market discussions drifted lower for June shipments of general-purpose (GP) moulding grade PC, averaging at $2,000/tonne CIF (cost, insurance and freight) China in the week ending 29 May, according to ICIS data.

Spot prices for the grade were down by $50/tonne from the preceding week, and some 9% lower from month-earlier levels.

Prices were at historical lows in almost a decade. On a CIF China basis, GP moulding grade PC prices last stood at $2,000/tonne levels in April 2009, ICIS data showed.

Asia PC prices were viewed as close to bottoming out in a market awash with supply.

“Warehouses in China are full of PC [inventories],” said a northeast Asia based market source.

Weak demand for imports coincided with the depreciation of the Chinese yuan (CNY) against the US dollar, making imported material uneconomical.

The bearish sentiment was further exacerbated by the ongoing US-China trade war, which left the market fraught with uncertainty as end-users turned cautious about making import commitments of PC resins.

The downward spiral in PC prices comes alongside weakening polymethyl methacrylate prices (PMMA) in China, amid lacklustre demand.

PC is traditionally more expensive an engineering plastic that rivals with PMMA in certain applications.

GP-grade PMMA prices stood at $2,150/tonne CFR (cost and freight) China in the week ended 23 May, down $100/tonne from month-ago levels, ICIS data showed.

Moreover, Chinese domestic PC supply may well be boosted with the commercial start-up of local plants, including China’s Sheng Yuan Group’s 130,000 tonnes/year facility located in Henan in the second-half of this year.

PC is widely used in the auto industry and housing industry for the manufacturing of products such as appliances, home electronics and some building materials.

Focus article by Melanie Wee

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