Since October 2022, the domestic bisphenol A market has declined sharply, and the market has remained sluggish since the New Year’s Day. As of January 11, the market negotiation was between 9600-9800 yuan/ton, down 37.7% from 15687 yuan/ton on October 1, 2022. The downward trend is mainly due to the serious contradiction between supply and demand, and it is difficult to support the upstream and downstream of the industrial chain.

Capacity release and supply increase, and capacity continues to expand in 2023, and supply pressure remains

Since October 2022, the supply of domestic bisphenol A has increased significantly, including 200000 tons/year of Luxi Chemical Group Co., Ltd., 240000 tons/year of Wanhua Chemical Group Co., Ltd., and 240000 tons/year of Jiangsu Ruiheng New Material Technology Co., Ltd., with a total capacity of 680000 tons put into production successively. However, except for the maintenance of several sets of devices in November, the loss of domestic devices is significantly lower than the increase in production, and the domestic supply of bisphenol A has an obvious increasing trend, Compared with the average monthly output of 180000 to 200000 tons in the previous period, the overall supply increased significantly in the fourth quarter.

In 2023, China’s bisphenol A production capacity will still increase and the supply pressure will remain. It is understood that another 610000 tons of bisphenol A production capacity will be put into operation in 2023, including 200000 tons/year of Guangxi Huayi, 170000 tons/year of South Asia Plastics, 240000 tons/year of Wanhua, and 680000 tons in the fourth quarter of 2022. It is estimated that the production capacity base will reach 5.1 million tons/year in 2023, with a year-on-year increase of about 38%. At present, the economy is in the recovery period, and there are still various uncertainties in the first half of the year. The supply side pressure caused by the continuous expansion of production capacity still exists.

The terminal demand recovery is uncertain under the epidemic situation

The impact of the epidemic on the domestic economic development and the recovery of terminal factory demand is still large, especially in the first half of 2023, which will remain the focus of market recovery. Although various policies have been introduced to boost the market, the recovery of demand still needs some time to digest. Downstream demand and consumption decreased. From November to New Year’s Day, products such as epoxy resin and PC were mainly used to digest the raw materials in stock. The purchase intention weakened, and with the decrease of terminal orders, downstream epoxy resin and other products fell simultaneously. After the New Year’s Day, the material preparation of the downstream wind power industry has improved, but the market fluctuation is not obvious. According to the monitoring data of Business News Agency, East China liquid epoxy resin has fallen by 25% and PC products have fallen by 8% since the fourth quarter.

Profit redistribution of bisphenol A industrial chain

It can be seen from the bisphenol A industry chain diagram that the decline of bisphenol A is greater than that of raw phenol and acetone, and the profit space of bisphenol A is decreasing. Especially in December, with the rebound of the phenol/acetone market, bisphenol A is not supported by costs, but continues to decline under supply pressure, and the industry profits and profits are in a loss state. From the perspective of the two downstream industries, the decline of epoxy resin was comparable to that of raw materials, while the decline of PC products was lower than that of raw material bisphenol A due to the impact of its own supply and demand. However, in view of the impact of high price raw material bisphenol A, PC was in a loss state, and the downstream PC turned into profit in the two months at the end of the year, and the gross profit of the industry increased. With the continuous release of top-down capacity and profit redistribution of bisphenol A industry, the capacity of each node will increase significantly in 2023, and the changes in supply and demand and profit at each node can be focused on.

As the Spring Festival approaches, the market demand is sluggish, and the market negotiation atmosphere of bisphenol A is quiet. The demand side of epoxy resin has been slightly improved by the downstream wind power industry stock, but the increase in demand is less than the expansion of the supply side, which is difficult to support the raw material bisphenol A. From the perspective of cost, the overall decline of phenol and acetone was greater than the rise. Recently, the market stopped falling and rebounded, but it was difficult to form a strong support for the cost. It is expected that bisphenol A will continue to operate in a volatile manner in the short term. With the gradual release of new capacity in the long-term bisphenol A market, the supply side is loose, and the market pressure is still high. Pay attention to the adjustment of main factories and the production of new capacity.