Polycarbonate Market Shows Mixed Trends and Economic Contraction Across the Globe

The price of Polycarbonate exhibited a mixed trend in the four major economies throughout August 2023. Global demand for Polycarbonate remained stagnant during this period due to reduced inquiries from overseas markets, as merchants focused on managing their existing stock levels.

During the past week, the price of Polycarbonate in Japan hovered around USD 2580/MT, marking a 2.4% appreciation. Similarly, prices in the German Polycarbonate market remained stable at USD 3770/MT throughout the last few weeks of August. Conversely, the Polycarbonate general price in the United States settled at USD 3344/MT, maintaining a consistent and stable pricing pattern.

The major advanced economies are experiencing a simultaneous contraction. The decline in business activity in the Eurozone and the UK, coupled with a nearly stagnant growth rate in the US, contrasts with the strong growth observed in Japan. This situation highlights how tightening monetary policy in Western economies suppresses overall demand.

In August, both the Eurozone and the United Kingdom reported a decline in production, while growth in the United States decelerated to the point of near-stagnation. Consequently, Japan stands out as the sole major developed economy that has reported expansion during this period.

All four economies have observed a decline in their manufacturing output, with the Eurozone and the UK experiencing notably steep drops. However, the service sector is more diverse. Japan has seen a steadily strengthening growth in service sector activities, while the Eurozone and the UK have witnessed a decline in activity, and the United States has seen a considerably weakened expansion.

These disparities in service sector growth can partly be attributed to differences in monetary policy. Notably, interest rates have been raised aggressively in the United States, the Eurozone, and the UK, while they have remained unchanged in Japan. It is worth noting that the service sector is typically the most sensitive part of the economy to changes in interest rates.

Similarly, in the case of foreign demand, orders for Polycarbonate to Japanese manufactured goods from overseas have fallen in August. Further, the production cost of Polycarbonate rose in August due to the expensive feedstock Bisphenol A prices influenced by the firm international Crude oil prices in the Asian market.

Japanese companies often cited increasing energy expenses and currency conversion costs as the primary factors contributing to their heightened cost responsibilities. It is expected that the pricing dynamics of Polycarbonate in the international market may exhibit a mixed pattern, influenced by the elevated interest rates observed in the US and European economies, which could potentially mitigate demand for Polycarbonate in their respective domestic markets.