Polycarbonate Market: Stability Amid Weak Demand and High Inventory

Key Highlights

• Price Trends: Polymer prices remained steady for most categories, except for HDPE (-₹1/kg) and LLDPE (-₹0.5/kg).
• Supply Growth: China's PC production rates rebounded to over 80%, contributing to abundant supply and high inventory levels.
• Market Conditions: High inventories and weak demand limited manufacturers' ability to raise prices, keeping the auction market subdued.
• Key Updates: Major developments include Naphtha price increases, SNF's milestone in Oman, and India's Styrenix acquiring Thai operation.

Polymer Prices Stable with Marginal Adjustments

• PP Raffia (±0) Rs 90/kg levels Ex Godown
• PP Film (±0) Rs 99.50/kg levels Ex Godown
• PPCP (±0) Rs 97.75/kg levels Ex Godown
• PP Lamination (±0) Rs 97/kg levels Ex Godown
• LLDPE (-0.5) Rs 86/kg Ex Mundra/Bhiwandi
• LDPE prices are around (±0) Rs 116/kg Ex Mundra/Bhiwandi
• HDPE PE100 natural (-1) Rs 86/kg Ex Mundra/Bhiwandi
• HDPE PE100 black (-1) Rs 88/kg Ex Mundra/Bhiwandi
• HDPE HM (-1) Rs 88/kg Ex Mundra/Bhiwandi
• HD Blow Molding (±0) Rs 91/kg Ex Mundra/Bhiwandi
• Low K (DG700) Rs 79 Ex Nhava Sheva/Mundra
• Low K (B57) Rs 83 Ex Nhava Sheva/Mundra
• LG LS100H Rs 76.50 Ex Mundra/Bhiwandi

China’s PC Production Surge Worsens Supply Excess

• In early December, the operating rate of polycarbonate (PC) production in China rebounded as companies like Jiaxing Emperor resumed operations, increasing the industry average rate from 75% to over 80%.
• Weekly PC production remained high at approximately 60,000 tons, resulting in abundant supply and a persistent mismatch between supply and demand. High inventory levels have prevented manufacturers from raising prices, and the auction market remains weak.
• On the raw material side, bisphenol A prices stabilized and rebounded due to delayed production, maintenance, and shipment issues, offering some support for PC costs.
• However, the demand side continues to be weak, with limited purchasing activity and resistance to high prices from downstream buyers, reflecting poor support for PC spot prices.

Polymer Marker Major Highlights

• Ningbo Huanyang starts maintenance at ECH units.
• European cyclohexane contract price settles for December 2024.
• MEG contract price settles in Europe for November 2024.
• Sabic likely to bring HDPE plant on stream.
• Naphtha prices march higher on Monday
• SNF achieves major milestone in Oman with polymer plant construction and RSTC progress
• India's Styrenix Acquires Thai Operations, ONGC Invests in OPaL, Epsilon Carbon Achieves Certification

Expert Opinion on Key Industry Developments

• The PC market showed general stability with slight gains in early December, driven by rising bisphenol A prices and cost-side support. Despite this, high inventories and loose supply have kept supply pressure unchanged, while weak demand persists with minimal downstream purchasing.
• PC prices have reached annual lows, which, along with cost-side benefits, contributed to the upward trend. However, the significant supply-demand mismatch is unlikely to improve soon, suggesting limited potential for further price increases. Monitoring cost-side trends will be crucial for future market developments.