Bisphenol S Prices Climb Amidst Surging Demand in Asia, Expect Further Increase in May

Mumbai (India): In the last few weeks, the price of Bisphenol S (BPS) in Asia has continued its bullish trend, driven by increased downstream demand and supply disruptions in China. Strengthened cost support from feedstock phenol and elevated crude oil prices also contributed to the rise. Despite a notable increase in average new home prices across 100 cities in March, total sales by value among 100 real estate companies saw a significant year-on-year decline in the first quarter, indicating ongoing challenges in the sector. The purchasing power of downstream products showed gradual recovery, supported by phenol and energy prices. Crude oil price surges, driven by positive US demand data and Middle East geopolitical tensions, further inflated BPS production costs. Incidents like attacks by Lebanese Hezbollah and Yemen's Houthi group, along with US sanctions on Venezuela and potential interest rate cuts by the US Federal Reserve, continued to impact global oil prices and the petrochemical industry.

The operating rate for BPS production increased as Zhejiang Petrochemical's maintenance activities resumed, and new production units were introduced. However, heavy rains and floods in southern China, particularly in Guangdong province, caused supply chain disruptions, leading to power outages and production facility closures in the Pearl River Delta. These conditions, coupled with increased procurement activity before the Labor Day holiday, drove up BPS prices. Global BPS prices also rose due to supply disruptions in China and Japan. Despite a slight easing in April, China’s manufacturing growth remained robust, indicating strong trading activity. Modest upticks in input costs from higher raw material and labor costs were observed, but inflation stayed below historical averages. Global average shipping container rates rose for the first time since January, further contributing to price increases.

BPS prices in the Indian domestic market remained strong, buoyed by robust demand from downstream polycarbonate and epoxy resin industries, particularly in the automotive sector. Epoxy resin demand is expected to stay steady with increased automobile sales in April 2024 from companies like Bajaj Auto and Mahindra & Mahindra, supporting stable consumption rates. This trend highlights the resilience of the automotive industry and its impact on related sectors like epoxy resin and polycarbonate. Following a surge in downstream thermal paper prices, BPS saw a notable increase. Koehler Paper's announcement of an 8% global price hike for thermal paper due to inflationary pressures further accentuated this trend. BASF's first-quarter results for 2024 suggested a modest recovery in the global chemical industry, driven by growth in the petrochemicals division. In April, the assessed price for BPS stood at INR 315,000/MT CFR JNPT, reflecting a 5% increase compared to March 2024.

ChemAnalyst anticipates an upward trajectory in BPS prices over the coming months, propelled by anticipated enhancements in demand from both domestic and international markets. This outlook is bolstered by Chinese and Indian government initiatives aimed at fortifying the construction sector, indicating promising prospects for BPS consumption in the respective markets.