European Polycarbonate Prices Fall, Asian Market Stable Amid Low Demand

During the last week of July 2024, the European market for Polycarbonate (PC) experienced a significant price decline of approximately 4.2%. This downturn is primarily attributed to persistently low demand for Polycarbonate across Europe, particularly affecting the automotive sector in Germany, which is a major consumer of Polycarbonate. Despite encountering some delivery issues, most buyers have managed to secure their required volumes. High freight rates have provided domestic producers with an opportunity to leverage their position, potentially pushing prices higher. However, despite these elevated costs, Asian imports have remained competitive. The ability of Asian suppliers to offset some of the higher domestic prices has allowed buyers to mitigate the impact of rising domestic offers, thus maintaining a balance in the market.

Concurrently, the upstream crude oil market also experienced a bearish trend, with prices falling by 3% on a weekly basis and affected the price of Polycarbonate. This marks the third consecutive weekly decrease in oil prices, driven by a combination of factors. Firstly, sluggish demand from China, the world's largest crude oil importer, has exerted downward pressure on prices. Additionally, ongoing ceasefire efforts in the Middle East have reduced the necessity for a risk premium on oil prices. The American Petroleum Institute (API) reported a 3.9-million-barrel decrease in US crude oil inventories, a figure confirmed by the Energy Information Administration (EIA), which noted a 3.7-million-barrel reduction in commercial inventories. This reduction reflects a significant shift in the market, driven by easing supply concerns and geopolitical tensions in the Middle East. Despite the overall downward trend in oil prices, signs of increased oil demand in the US provided some upward momentum for prices later in the week which may affect the price of Polycarbonate in the first half of August 2024.

Furthermore, spot ocean container rates, which had been on the rise since early May, fell by 2% this week for 40-foot containers, marking the first decline in rates during this period and supported the price trend of Polycarbonate. This decline in container rates can be attributed to various factors, including reduced demand and improved supply chain conditions.

In the Asian market, the price of the Polycarbonate remained stable throughout the week, supported by a balanced equilibrium between supply and demand. This stability reflects an effective alignment between available quantities of Polycarbonate and buyer needs, preventing significant price fluctuations. The global oil market’s downward trend, influenced by reduced demand from China and cautious optimism surrounding a potential ceasefire in Gaza, has contributed to the ongoing decrease in oil and Polycarbonate prices.