1. Hot Topics of the Month

1) Domestic PC production this month has increased significantly compared to last month.

2) The average price level of the domestic PC market this month showed an expanded month-on-month decline.

The losses in the PC industry further increased this month.

2. Market Analysis for This Month

In March, the domestic PC market price reached a new low. As of the end of March, the mainstream trading price of domestic injection-grade PC in the East China market was 12,000-12,500 RMB/ton, down about 250 RMB/ton from the end of last month, a decline of 1.96%-2.04%. Year-on-year, it dropped by 1,700-1,800 RMB/ton, a decrease of 11.97%-13.04%. On the supply side, the capacity utilization rate of the domestic PC industry further increased compared to last month. Although there were temporary reductions in output from the PC facilities at Sichuan Tianhua, Dafeng Jiangning, and Luxi Chemical, the Hainan Huasheng PC facility resumed operations in late February, resulting in an overall operating rate above 80% this month. The second line of the Yanhua PC facility started operation in mid-month, and the operating conditions of the Zhejiang Petrochemical PC facility also improved compared to last month. Despite these factors, the domestic PC supply still increased compared to last month, with a monthly output exceeding 300,000 tons. On the pricing front, due to the continuous increase in domestic PC supply and the weak downstream demand, the supply-demand gap in the industry widened, and inventory levels continued to rise, putting significant pressure on market sentiment. Throughout the month, PC prices fell sharply, with domestic material prices basically dropping to around 12,000 RMB/ton, a five-year historical low. Although there were some announcements of maintenance for certain PC facilities in April at the end of the month, most of these were short in duration and unlikely to provide effective support for the market, leaving PC prices to stabilize at a low level. On the demand side, overall demand for PC in March was significantly lower than that in the same period in previous years, with many industries experiencing poor new order situations. The procurement of PC for essential needs was also very sluggish. As the month progressed, the modified materials sector saw some recovery, but different types of factories experienced significant differentiation, with some making moderate purchases of low-priced PC before adopting a wait-and-see approach.

3. Market Influencing Factors Analysis

This month, domestic PC production reached 300,300 tons, a significant increase compared to last month.

In March, the domestic PC capacity utilization rate was 84.75%, an increase of 3.20 percentage points compared to the previous month.

3) This month, the average gross profit of the PC industry is -618 yuan/ton, decreased by 77 yuan/ton compared with last month.

4. Market Forecast for Next Month

In terms of cost, the price of bisphenol A, a raw material, fluctuated within a narrow range in April, with little change in the cost of PC compared to the previous month. On the supply side, four domestic PC units underwent shutdowns for maintenance in April, leading to a significant increase in supply losses. However, considering the high inventory levels in the industry due to previous high supply and the gradual market release of products from the new PC unit in Zhangzhou, Fujian, these factors will restrain market fluctuations. On the demand side, PC downstream demand in April was still affected by external import tariffs and domestic trade consumption, among other factors. Although there is an expectation of recovery in rigid demand for PC, its impact on industry inventory reduction is limited. Overall, changes in raw materials and demand in April are unlikely to boost the PC market. The reduction in supply will be the key factor driving the market's bottoming out and recovery. Additionally, against the backdrop of an oversold market, industry participants have a strong desire for price increases. However, considering the high industry inventory and the short actual shutdown periods of most units, the expected price increase for PC within the month is limited. The spot market price range for domestic PC in East China is projected to be between 12,100 and 12,500 yuan per ton.