Polycarbonate Prices Ease in China, North America and Europe Maintains Stability

Throughout the week ending on 24^th May, the price of Polycarbonate (PC) remained stable in the North America, particularly in the US and Mexican markets. This stability is primarily attributed to a balanced gap between demand and supply. The downstream automobile industry saw an improvement in demand, driven by significantly increased inventory levels, leading to more appealing incentives. However, vehicle affordability issues, influenced by high interest rates and elevated new-vehicle prices, continue to negatively impact sales, as typical monthly payments for new-vehicle loans remain high.

In Europe, the price of PC also remained stable this week, particularly in Germany, the UK, and Italy, thanks to a balanced gap between demand and supply. Additionally, the downstream automobile industry performed well during this period. Last month, the European Automobile Manufacturers’ Association (ACEA) reported a more than 13% increase in new car sales in the EU market.

In contrast, the domestic PC market in China continued to decline this week, with spot prices of various brands generally reduced, particularly in the Chinese market where prices decreased by approximately 0.5%. The weakness in the market is primarily driven by the continued softness in the feedstock bisphenol A market. Upstream, the phenol market showed limited momentum after the festival, coupled with low demand. The acetone trading atmosphere also remained poor, contributing to the overall weakness in bisphenol A, which in turn dragged down the PC market by increasing costs. Despite the stability in the overall operating rate of the domestic PC industry, the average operating rate fell this week. The market is currently experiencing an abundant supply of goods, leading to weakened enterprise sentiment and reduced ex-factory prices. Although some enterprises have maintenance plans in the near future, the impact on production capacity is expected to be minimal.

In the short term, market supply pressure in China is likely to remain high, further depressing PC prices. On the demand side, PC consumption remained light, with the main focus on maintaining production and digesting inventory. Downstream enterprises reduced their operational loads and showed decreased enthusiasm for stockpiling, leading to a decline in consumption. Buyers exhibited resistance to high-priced sources, offering poor support for spot prices. As a result, the PC market experienced continuous declines this week. The weakening of upstream bisphenol A prices further eroded the cost structure of PC. Domestic polymerization plants maintained consistent production levels, but declining demand and weak on-site trading reinforced the market's downward trend.

In summary, the domestic PC market in China fell consistently this week due to a combination of weak raw material support, stable yet reduced industry operating rates, and declining demand. The market is expected to remain weak in the short term.