Price performance

In August, domestic bisphenol A surged, fell back, and overall declined. At the beginning of the month, spot trading in East China was discussed at around 9700-9750 yuan/ton, but it quickly weakened in the middle of the month and fluctuated at a low level in the second half of the month. The mainstream transaction at the end of the month fell to 9200-9350 yuan/ton, with a monthly decline of about 300-400 yuan/ton. High price transactions were weak, and the market shifted from rising prices to shipping games.
1. During the off-season of demand, there is insufficient downstream absorption (the core pressure)
1) Epoxy resin: During the off-season of traditional coatings and flooring from July to August, solid epoxy production only reaches 40-45%, while liquid epoxy production reaches 60-65%; Downstream coatings, infrastructure, and real estate terminal orders are weak, and resin companies are losing money. They only replenish inventory for essential needs and refuse to purchase goods at high prices. 2) PC polycarbonate: The production of the equipment is still acceptable, but the terminal consumption of household appliances and sheet materials is flat, and the profit of PC itself is compressed. The procurement maintains a low inventory mode, and there is no active hoarding behavior. 3) The overall procurement logic has shifted to on-demand procurement, with intermediaries unwilling to build warehouses and high priced goods being blocked from circulation. Holders of goods offer discounts for shipment.
2. The marginal pressure on the supply side has risen, and maintenance support is limited
The supply contraction caused by the concentrated load reduction and maintenance in July gradually eased in August, and some phenol ketone and bisphenol A units were restarted one after another. The industry’s operating capacity slightly rebounded from the low level to the 65-70% range.
Although some devices have arranged short-term maintenance in August, which has formed a positive stage, the reduction has insufficient impact and is difficult to reverse the weak pattern of the off-season; Port imported goods continue to replenish the East China market and increase circulation supply.
3. Loose cost support and transmission of losses in the industrial chain
Upstream phenol briefly rose in the first half of the year and then began to decline in the middle. Pure benzene and acetone lacked sustained upward momentum, and the cost side’s support for bisphenol A weakened; The price difference of bisphenol A processing has been inverted for a long time, and the industry maintains a loss making state: once the upstream raw materials weaken, bisphenol A loses its price basis; At the same time, the negative feedback chain of Sina Finance is formed by the trend of “cost increase → downstream not following the rise → forcing raw material correction”.
4. Market sentiment and trading surface
At the beginning of the month, there was a short-term bullish sentiment in the market due to the expectation of maintenance and production reduction, but after high prices, transactions quickly shrank, and traders shifted from reluctance to sell to selling; On October 20th, the average daily spread of Shengyi Society changed from strong to stagnant and bearish, with a lack of buying verification at high levels and downward pressure on prices.
Typical contradictions in August: staged supply recovery+traditional off-season demand+cost support swing+downstream profit transmission rupture. The factory has a willingness to raise prices due to losses, but there are no orders from the terminal to take over. The market presents a weak and volatile pattern of “wanting to rise but not moving, easy to fall but difficult to rebound”.
Future forecast
1) Efforts to fulfill the traditional peak season of downstream coatings and electronics industries in September; 2) Fluctuations in phenol acetone raw materials and domestic equipment maintenance/restart plans; 3) Port arrival volume and inventory accumulation rhythm; 4) Changes in the operation of epoxy resin and PC factories.