Why Was Polycarbonate So Difficult in The First Half Of The Year
The highest price in the past 20 years has encountered the deepest resistance in the market; how can we break through the dilemma that bread is cheaper than flour? The low price is also difficult, and the high price is also difficult. Why did the PC struggle in the first half of the year? I hope to answer this article.
1. The industry suffers serious losses
Although the PC market fell for several days from May to June, the price was still at a historical high level, which shows how exaggerated the PC growth rate was in the previous period. From January to April, the raw material bisphenol A, driven by its other downstream epoxy resin, savagely rose. It once touched 30,000 yuan/ton, and PC could only move up passively. However, the downstream side is relatively resistant to this, and the cost and the direction of the transaction continue to deviate. According to statistics from China Plastics Online, in 2021, the average price difference between domestic PC and BPA is about 1,500 yuan/ton, and the industry suffers serious losses, with a gross profit of about -1,000 yuan/ton. The situation in March-April was particularly bad, and it was basically in the upside-down stage.
2. rapid expansion of production capacity
The problems encountered by PC are similar to those of polyolefins. In order to get rid of foreign monopolies, PC production capacity has been launched in recent years. As of the first half of 2021, the total domestic PC production capacity was 2.2 million tons/year, a year-on-year increase of 350,000 tons/year, an increase of 19.5%. More importantly, in the second half of the year, there are still three units of Hainan Huasheng, Zhongsha Tianjin, and PingmeiShenma. It is estimated that the total annual production capacity will reach 2.82 million tons/year, a year-on-year increase of 52.3%, ushering in the historical expansion of PC The highlight moment of energy.
3. The market starts with limited load
Due to the oversupply, the domestic PC industry has generally started poorly in recent years. In 2019, the average operating rate was only 68.4%, and in 2020, it dropped sharply to about 50.2%; in 2021, with severe losses, domestic PC operations became more bleak, with the operating rate only 49.8% in the first half of the year, and the output was about 550,000 Tons, far below the increase in production capacity, it is hard to say ideal.
4. Normalization of the global epidemic
Although the domestic epidemic has been widely controlled, the foreign virus continues to mutate. The terminal consumption environment is always in an unstable state. In addition, the shortage of domestic chips also indirectly restricts the number of orders for the downstream automotive industry. The transaction problem cannot be solved in one day, and the PC market cannot completely improve in one day.
