SINGAPORE (ICIS)--Spot prices of bisphenol-A (BPA) in Asia have slumped to a five-month low, undermined by stagnant import demand and weak Chinese domestic prices, with near-term outlook bearish, market sources said on Monday.
BPA prices on a CFR (cost and freight) basis were assessed at an average of $1,185/tonne CFR China on 12 May, unchanged from the preceding week but down from $1,275/tonne CFR China from month-ago levels, ICIS data showed.
Current spot prices are also at their lowest since December last year, according to the data.
Physical liquidity centred on BPA cargoes bound for China was low, as the trading week was punctuated by public holidays observed in parts of northeast and southeast Asia.
A lack of fresh cargo transactions were detected, as market participants mostly preferred to wait and see before taking any firm import positions.
The near term outlook was bearish on the back of sluggish import demand and relatively ample supply.
A majority of market participants acknowledged weakness in downstream demand at this time, casting a pall on sentiment.
“[Downstream] epoxy resins demand is weak … spot prices beyond the low $1,200s/tonne CFR China is too high to do deals,” a northeast Asia-based market source said.
The downbeat market mood was mirrored in downstream epoxy resin plants in China that were understood to be running at an average of just about 60% of capacity, against a backdrop of subdued buying impetus.
Moreover, weakness in upstream crude oil and energy sectors, combined with declines in raw material phenol prices were perceived by market sources among factors that could generate downward pressure on BPA prices in the short term.
Moreover, Chinese domestic prices of have in recent days declined substantially that have resultantly made imports generally unappealing, sources added.
This has already led to the CFR China price assessment, if netted back, being at some distance apart from Chinese domestic prices.
Given where Chinese domestic prices are, it might be more economical to secure BPA supplies domestically rather than rely on imports, another northeast Asia-based source said.
Chinese domestic BPA prices in east China were at yuan (CNY) 9,000-9,150/tonne EXWH (ex-warehouse) in the week ended 12 May, down from the previous week’s CNY 9,100-9,200/tonne EXWH, according to ICIS data.
Yuan-denominated prices are down by some 7% in comparison with levels a month ago.
Focus article by Melanie Wee