In the first week of September 2024, the domestic Polycarbonate (PC) market in Asia faced persistent downward pressure, with prices fluctuating at low levels. Despite stable operations across the sector, with the downstream industry average operating rate inching up by mid-month, the PC market remained oversupplied since August 2024.

In mid-August, spot supply was sufficient, and PC prices lingered at their lowest point in Asia. Although manufacturers attempted to raise prices to stabilize the market, their efforts yielded minimal results, leaving little room for further price hikes. The planned maintenance scale remains moderate, with Wanhua Chemical in China, which previously shut down its entire production line, resuming operations on August 23, potentially lifting industry operating rates slightly. However, the sluggish flow of new orders and weak supply-side support continue to weigh heavily on PC prices towards the southward trend.

From a raw materials perspective, bisphenol A (BPA) prices remained weak throughout August. The initial rise in international crude oil prices was offset by a dampened demand outlook, which negatively affected BPA’s direct feedstock, phenol, and acetone. Additionally, reduced downstream production and weak inventory levels led to tepid demand for BPA. The future outlook for BPA supply is flat, with maintenance and production resumption activities balancing each other out, ultimately reducing the cost support of BPA to PC production for the time being.

On the demand side, the outlook for PC consumption remained lackluster in the first week of September 2024. Procurement activity leaned heavily toward weak rigid demand, with factories primarily purchasing to maintain current production levels. Downstream enterprises operated at low capacities, exhibiting minimal interest in stockpiling, while consumption levels also remained low. Buyers showed strong resistance to high-priced goods and reacted negatively to price increases from PC manufacturers. The slow circulation of cargo in the market compounded the weak demand, further depressing spot prices.

Overall, the PC market continued its downward trajectory throughout August, with weak support from upstream raw materials like BPA. Supply-side factors showed little improvement as domestic polymerization plants operated at a steady rate. While PC prices have reached their lowest levels of the year, the market has yet to experience a rebound, largely due to weak demand from downstream sectors. With supply-demand imbalances unlikely to correct in the short term, it is expected that the deep-rooted market challenges may cast a shadow over the traditional peak season, making any significant price recovery shortly unlikely.

As per ChemAnalyst, it is expected that this ongoing supply-demand contradiction will make it difficult for the PC market to experience a meaningful recovery in the months ahead.