Supply Maintenance Supports PC Market, Prices Rise Then Fluctuate in April

Monthly Hot Topics

① Multiple PC units were subjected to reduced load or shutdown for maintenance within the month, leading to a significant decline in industry capacity utilization on a month-over-month basis, and the contraction in the supply side provided certain support to the market.

② The high price of PC faced resistance in passing through to downstream end markets, with limited market acceptance, leading PC prices to rise initially but then retreat from their high levels this month.

In April, the average market price of a certain domestic PC material was 15,232 yuan/ton, a month-on-month increase of 2.23%, with the overall price still showing some upward trend.

II. Analysis of This Month’s Market Conditions

In April, the domestic PC market as a whole showed a trend of strong price increases in the first half, high-level fluctuations in the middle, and pressure-induced declines in the latter part. The leading logic of the market situation shifted from supply-side maintenance and reduction to the decline in raw material costs and the weakening of downstream demand. The overall market sentiment shifted from bullish to watchful, and the trading pace slowed significantly with the market fluctuations. At the beginning of the month, under the expectation of supply tightening, producers collectively raised prices actively, and the PC market price rose steadily, with a strong bullish atmosphere. In the middle of the month, the price trends for PC products from different processes diverged, with the prices of products using the phosgene method remaining firm at high levels, while those of non-phosgene method products fell significantly. The market was mainly in a weak adjustment phase, under the dual pressure of weakening raw material prices and sluggish demand. In the latter half of the month, influenced by the continued decline in the price of the raw material BPA and insufficient follow-up from downstream rigid demand, the market's speculative buying sentiment subsided. Merchants mostly adopted a strategy of price concessions to move inventory, and the spot prices gradually came under pressure to decline. At the end of the month, driven by the auction price surge of Zhejiang Petrochemical and the release of pre-May Day inventory replenishment demand from downstream, the market showed a tail-end rise. As of the close on April 28, the main negotiation range for domestic injection molding grade PC in the East China market was 14,250-16,500 yuan/ton, a decrease of 50-500 yuan/ton from the end of the previous month, representing a decline of 0.30%-3.39%. Compared to the same period last year, prices increased by 3,250-4,500 yuan/ton.

III. Analysis of Market Influencing Factors

1) In terms of production, domestic PC output this month was 275,300 tons, down by 42,300 tons from last month, primarily due to plant maintenance and reduced operating rates.

2) Regarding capacity utilization, the domestic PC capacity utilization rate in April was 77.64%, a decrease of 9.04 percentage points from the previous month, indicating a notable decline in the industry’s overall operating level.

3) In terms of profitability, the average gross profit margin for the PC industry this month was RMB 1,727 per ton, an increase of RMB 705 per ton compared to last month (note: the industry cost formula is 0.9 × BPA price + 4,000). Profitability has improved somewhat, with bisphenol A price fluctuations significantly impacting PC production costs.

IV. Market Forecast for Next Month