Shanghai (China): In recent weeks, there has been a surge in Bisphenol A prices in China's domestic market, driven by strengthened cost support from phenol feedstock, escalating crude oil prices, and internal supply disruptions, while acetone, another feedstock, experienced a slight decline. This price increase coincided with a significant rise in demand for downstream polycarbonate, particularly in the construction sector, fueled by increasing home prices. Real estate data revealed a substantial 0.27% month-on-month increase in the average new home price across 100 cities in March, the most significant spike since July 2021. However, despite this positive trend, total sales by value among 100 real estate companies plummeted by 49.0% year-on-year in the first three months of the year, indicating prolonged challenges in the sector's recovery.

Furthermore, demand for epoxy resin, downstream of Bisphenol A, remains robust in the automobile sector, with Chinese manufacturers selling 177,583 plug-in hybrid electric vehicles (PHEVs), significantly more than battery electric vehicles (BEVs), achieving a 69% year-over-year increase, while BEVs reached 134,465 units, up by 29%. This sustained demand in the automotive sector contributes to keeping the BPA price healthy. Additionally, following a surge in downstream thermal paper prices, Bisphenol A experienced a notable increase. Koehler Paper's recent announcement of an 8% global price hike for thermal paper due to inflationary pressures in key input factors further accentuated this trend.

Furthermore, upstream crude oil prices have steadily climbed due to various factors, including positive demand indicators from the US and escalating geopolitical tensions in the Middle East. Recent incidents, such as attacks by Lebanese Hezbollah and Yemen's Houthi group targeting Israeli interests, have further fueled supply concerns. Additionally, US sanctions on Venezuela, combined with uncertainties surrounding potential interest rate cuts by the US Federal Reserve, continue to impact global oil prices and subsequently affect the petrochemical industry on a global scale.

The surge in Bisphenol A prices was driven by sustained growth in the Chinese manufacturing sector, marked by increased new work inflows both domestically and internationally. April saw the sector's sixth consecutive month of improvement, with the most significant growth observed in 14 months, instilling heightened optimism among manufacturers. This positive sentiment translated into increased purchase quantities and positive inventory outlooks, indicating ongoing market expansion and price increments.

Moreover, the industry's overall operating rate experienced an uptick, reaching an average of approximately 78%. Despite the gradual resumption of maintenance at Zhejiang Petrochemical, the emergence of new production units and a slight resumption of work contributed to increased supply. Additionally, disruptions in the Bisphenol A supply chain occurred due to heavy rains and floods in southern China, particularly in Guangdong province, compounded by power outages and production facility closures in the Pearl River Delta, leading to supply shortages and higher prices.

Heightened procurement activity was noted towards the end of April ahead of the Labor Day holiday from May 1-5. Furthermore, global Bisphenol A prices surged due to supply disruptions in China and Japan, where certain Bisphenol A plants underwent shutdowns, further straining the supply chain. Maintenance shutdowns at Sinopec-Sabic Tianjin in China and Mitsui Chemicals in Japan exacerbated the scarcity of Bisphenol A globally. Meanwhile, the DOW Q1 2024 results indicated an increase in coatings net sales, attributed to seasonally higher volumes for building and construction end-markets, with gains seen across all geographic regions. As of 3rd May 2024, the assessed price for Bisphenol A stood at USD 1160/MT FOB Qingdao, reflecting a 5.4% increase compared to April 12th.

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