PC: Supply and demand imbalance breaks down

　　In the first half of the year, the polycarbonate (PC) market showed a downward trend of regional shocks, especially in June, the decline intensified, and the market broke down
.
According to the statistics of Chemical Industry Online, as of the end of June, the price of PC has dropped to 17,700 yuan (ton price, the same below), a drop of nearly 20% from the beginning of the year
.

　　Zhang Lei, Deputy General Manager of Luxi Group: Demand Costs Clamp the Market

　　The PC market is no longer brilliant in the first half of the year
.
Taking Lotte 1100 in East China as an example, the average price in the first half of the year was 21,400 yuan, down 17.
93% year-on-year
.
Among them, the highest price appeared in March, at 23,500 yuan; the lowest price appeared in June, at 18,800 yuan
.

　　On the whole, although the market started flat in the first quarter, it began to rise in the first half of March, and the price hit a high point in the first half of the year
.
It started to fall back gradually in late March, and since then the market continued to fluctuate
.
In June, the short side of the market dominated the market.
The price of some domestic materials fell below 16,000 yuan, while the imported materials basically fell back to around 18,000 yuan, and the overall price basically hit the lowest point since 2021
.

　　The main factors restricting the trend of the PC market are cost and downstream demand
.

　　The sharp rise in PC prices in mid-to-early March was mainly affected by the outbreak of the conflict between Russia and Ukraine, and the crude oil market rose sharply, stimulating the overall rise in commodity prices
.
With the sharp rise in raw materials, low-cost sources of goods are gradually consumed, and high-cost sources of goods have entered the market one after another.
In addition, PC manufacturers have increased their ex-factory offers, adding further support to the market's bullish mentality, and traders' offers have been raised
.
Under the bullish market, downstream and some retail investors also entered the market to stock up, the overall market trading was good, and traders' speculation was more obvious
.

　　Since then, the raw material bisphenol A offer has been weak, driving the PC market to continue to decline
.
In the first half of the year, Zhejiang Petrochemical and Hainan Huasheng BPA successively entered the market
.
As of the end of June, China's total production capacity of bisphenol A has increased to 2.
725 million tons per year, a year-on-year increase of 36.
59%
.
The production capacity of bisphenol A has increased significantly, resulting in a continued weakening of the market, and the factory offer has also been greatly reduced, reaching as high as 1,000 yuan
.
The cost support weakened, and the quotations of PC imports and domestic materials fell sharply
.

　　In terms of demand, the epidemic has repeatedly occurred in many places in China, the demand has weakened as a whole, and traders are under pressure to ship
.
Hainan Huasheng and Pingmei Shenma PC devices have been put into production successively, resulting in intensified supply and demand contradictions, and the PC market has fallen
.

　　Meng Xianxing, Vice President of Shandong Chemical Industry Research Institute: The contradiction between supply and demand is difficult to alleviate

　　In the later period, it is expected that the overall domestic PC market will show a trend of first decline and then rise
.
With the arrival of "Golden Nine and Silver Ten", the PC market may have a wave of higher expectations, but the contradiction between supply and demand is still prominent, which may restrict the room for PC prices to rise
.

　　From the perspective of supply, Pingmei Shenma’s 100,000-ton/year plant was restarted, Hainan Huasheng’s 260,000-ton/year plant was restarted and the operation gradually stabilized, and Zhongsha Tianjin’s 260,000-ton/year plant was put into operation at the end of June.
PC spot supply remains high
.

　　From the perspective of demand, although the State Council has launched a package of 33 policies and measures to stabilize the economy in 6 areas, the economy is expected to gradually recover, but the recovery of downstream industries will still take time, and it is expected that the recovery of PC terminal demand in the third quarter will be limited
.
However, the demand for "Golden Nine Silver Ten" may have a positive performance
.

　　In the first half of the year, the overall demand for PCs did not increase, and the terminal consumption showed a trend of gradually weakening
.
The operating rate of the sheet metal and bucket industries has gradually decreased, especially with few orders from sheet metal factories, and the export market continues to be sluggish
.
However, these areas are expected to be moderately repaired in the second half of the year
.
It can be concluded that there will be no less supportive policies from the state.
The release of funds from August to September, the resumption of work and production in various fields, and the promotion of the economy will be the key
.
Therefore, policies such as the RRR cut in September have a certain probability and will also play a certain role in promoting demand
.

　　In addition, new energy vehicles are also positive, and the output has increased significantly, which has formed a support for the PC market
.

　　However, the overall demand growth cannot keep up with the expansion speed of PC
.
The PC industry has entered a stage of total surplus, and the price war will become more and more intense, making it difficult to reproduce the former glory
.
Therefore, the industry should improve product quality as soon as possible, differentiate production, actively increase product certification to replace import demand, and at the same time accelerate the pace of developing overseas markets to promote the healthy and orderly development of the industry
.

　　Wang Haifeng, deputy general manager of Shandong Lihuayi Group: Upstream support is expected to weaken

　　In the second half of the year, the domestic bisphenol A market will continue its weak and volatile trend, and the overall fluctuation space is expected to be narrower than that in the first half of the year
.

　　From the upstream point of view, in the second half of the year, the new production capacity of acetone will be put into operation.
A total of 4 units are planned to be put into operation in China, with a total of 715,000 tons of new production capacity per year, accounting for 31.
35% of the total domestic production capacity
.
Although the production of new plants is concentrated, most of them will be put into production at the end of the year, and it is not ruled out that some of them will be put into production early next year, so there will be no sudden increase in the supply of acetone
.
On the whole, under the pressure of supply, the domestic acetone market will continue to fluctuate at a low level in the second half of the year, and it will be difficult to support bisphenol A in terms of cost
.

　　From the perspective of supply, the new production capacity of bisphenol A will also increase significantly in the second half of the year, and the volume of goods may continue to rise
.
It is understood that there will be 8 new bisphenol A units planned to be put into operation in the later stage
.
It is estimated that in the whole year of 2022, the total production capacity of bisphenol A in China will reach 4.
405 million tons, a growth rate of 89.
46% compared with that in 2021
.

　　From the perspective of demand, although the downstream epoxy resin industry has 1.
54 million tons/year of units under construction in the future, the PC industry also has 1.
425 million tons/year of units under construction
.
These devices will be put into operation in the next 2-3 years, which will strongly stimulate the demand for bisphenol
A.
However, the short-term pulling effect cannot be seen, especially in the early release of bisphenol A production capacity.
It is expected that the market will fluctuate within a narrow range after bottoming out in the third quarter.
The high point may appear in September, and the overall support for PC costs is limited
.