European Bisphenol A Prices Drop Amidst Construction and Automotive Sector Challenges

The petrochemical sector plays a significant role in fostering Europe's economic growth, accounting for more than 25 percent of the overall European chemical industry. The latter, in turn, achieved sales totaling approximately US$1 trillion in 2021. Nevertheless, the European chemical and petrochemical industry, including Bisphenol A, faced a noteworthy sales decline in 2022.

In the last two months, October and November, the price of Bisphenol A has consistently dropped. This decrease is mainly due to the reduced cost of its upstream component, benzene, and the lower cost of the raw material phenol. This results from decreased demand in industries using polycarbonate and epoxy resin, especially in automobiles and construction. The Netherlands primarily imports Bisphenol A for making polycarbonate plastics and epoxy resins. Epoxy resins find applications in various industries like sealants, coatings, automotive primers, and more. On the other hand, polycarbonate resins are lightweight, high-performance plastics used in everyday items such as eyeglass lenses, electronics, safety gear, and food packaging.

In November 2023, new orders in the euro area kept going down, leading to a continued decline in business activity for the sixth month. Although the rate of decline was less than in previous surveys, manufacturing and services faced challenges from too much capacity and decreasing demand. Staff levels were reduced for the first time since 2021, and purchasing activity and inventories were cut back. Bisphenol A's downward trend continued in November for the past two months because of low demand in the end-use industries like automobiles and construction. The sale was lower in October than in September, as per the latest data. The oversupply in the Netherlands' domestic market was further fueled by abundant Bisphenol A availability from the Far East Asian market and cheap imports from China, where global Bisphenol A demand was also low. The Purchasing Managers' Index (PMI) data indicates ongoing contractions in the euro zone's construction and manufacturing sectors. In November, the Netherlands' PMI index was 44.9, lower than 50, reflecting subdued demand.

The bearish trend of Bisphenol A in the Netherlands persisted beyond September, with diminished procurement activities of Bisphenol A indicating a price decline. September witnessed a Bisphenol A price of USD 1808/MT FD Rotterdam, which experienced a significant drop of Bisphenol A to USD 1600/MT FD Rotterdam in October, reflecting an 11.5% reduction. Furthermore, in November, the price of Bisphenol A further decreased to 1490/MT FD Rotterdam, representing a 6.8% decline.

ChemAnalyst forecasts that the prices of Bisphenol A are expected to improve in the coming months across the globe once the automobile and construction industries speed up after the winter.