Market Analysis of Polycarbonate

Polycarbonate (PC for short) belongs to an engineering plastic, which is a colorless, odorless, transparent and amorphous thermoplastic polymer. Polycarbonate can be divided into aliphatic, alicyclic, aromatic, etc. However, due to factors such as processing performance and production cost, only bisphenol A-type aromatic polycarbonate can be produced on a large scale.

Bisphenol A polycarbonate has good transparency, strong impact strength, excellent thermal stability, creep resistance, cold resistance, and good electrical insulation and flame resistance. It is used in construction, electronics It has a wide range of uses in various fields of the national economy such as automobiles, automobiles, and medical care. The production process of polycarbonate is relatively complicated. Only a few large companies in the world have production capacity. Domestic manufacturers are foreign-funded or joint venture companies. With the increasing demand in the construction and automotive industries in North America and Western Europe, Asia is particularly It is China that is increasing the scale of investment in PC production, and the global production capacity that has been built up to now is 5.605 million tons.

World PC Market

The world's PC production and consumption demand has grown steadily, and the growth rate of production capacity is higher than that of consumption. In 2019, the world's PC production capacity increased by 8.4% year-on-year, output and demand increased by 3.9% respectively, and the average operating rate of devices was 77.7%, down 3.4% from the previous year.

The growth of demand in Asia has driven the rapid improvement of the world's PC production capacity, and the world's PC production center has shifted to Asia, especially China and other Northeast Asian countries. In 2019, Northeast Asia, North America and Western Europe's production capacity accounted for 85.5% of the world's total production capacity, output accounted for 85.3%, and consumption accounted for 80.2%. With the continuous increase of China's production capacity, PC production capacity in Northeast Asia increased from 38.2% of the world's total production capacity in 2014 to 49.7% in 2019.

In 2018, the total international trade of PC reached 11.76 billion US dollars, and the total trade volume was 3.94 million tons, an increase of 19.6% and 12.2% respectively year-on-year. In terms of price, the average world PC export price in 2018 was US$2986.0/ton, a year-on-year increase of 6.9%. China, Mexico, and Hong Kong, China are the world's major PC importers, and their combined imports account for about 44.4% of the world's total imports. South Korea, Thailand and the United States are the main exporting countries, and their combined exports account for approximately 36.6% of the world's total exports.

China PC Market

China's PC production capacity is expanding rapidly. In 2019, PC production capacity increased by 33.4% year-on-year, and output increased by 27.2% year-on-year. China's PC supply and demand structure is unbalanced, especially high-performance products, which still need to be imported in large quantities every year, and low-end products will have a risk of oversupply.

As of the end of 2019, there were 11 PC manufacturers in China, mainly located in Shanghai, Shandong and Zhejiang provinces and cities. With the steady increase in domestic demand, new or expanded installations in various regions will be put into production one after another. New capacity will no longer be limited to East China and North China. Central and South China have investment plans.

In the context of increasing domestic supply, China's polycarbonate imports remain high, maintaining a relatively high degree of external dependence. In 2019, China imported 1.59 million tons of polycarbonate, an increase of 12.2% compared to 2018, and the import volume increased significantly; the export volume was 256,000 tons, basically the same as the previous year. The net import of polycarbonate was 1.334 million tons, a year-on-year increase of 15.3%, and the degree of foreign dependence was 60%. Under the background of the raging new crown pneumonia, in the first half of 2020, China imported 750,000 tons of polycarbonate, a slight increase over the same period of the previous year. It can be seen that the gap between supply and demand is expanding, and the future import substitution space is relatively large.

In 2019, China's apparent PC consumption increased by 20.5% year-on-year, and the self-sufficiency rate increased by 2.2% year-on-year. China’s PC consumption structure is basically the same as that of the world, but the consumption ratio is different. China’s PC consumption in electronics/electrical and appliances/household products accounts for a higher proportion of the world’s consumption, while it is lower in automobiles and films/sheets. Proportion in the world. The apparent consumption in the first three quarters of 2019 was 1.65 million tons, and the apparent consumption in the first three quarters of 2020 was 1.71 million tons, a year-on-year increase of 3.6%.

In the first quarter of 2020 and the first half of the second quarter of 2020, the PC market was affected by global public health events, and the weakness was mainly down. By the end of April and the beginning of May, the upstream of the PC basically resumed work, the downstream demand has grown, and the PC market has gradually recovered. The price once dropped to 10,800 CNY/ton and then gradually rebounded to 15,000 CNY/ton. By the end of September, the price increased to 18,000 CNY/ton. After November, the price generally increased by 1,000 CNY/ton, and the price was slightly higher than last year. As the price of raw materials stabilizes, the price of polycarbonate may remain around 19,000 CNY/ton during the year.

According to Zhuo Chuang Information's polycarbonate production cost calculation model, the current polycarbonate cost reference is 15,375 CNY/ton, and the corresponding profit margin can be inferred based on the current polycarbonate market price. At present, the domestic PC market is intertwined with factors such as high costs, profit-making, and poor supply circulation, which have led to price fluctuations and profit fluctuations of polycarbonate. However, industry institutions estimate how stable the domestic installations are operating in the near future, and the expected increase in industry starts is visible, and the market terminal just needs to purchase cautiously. Although the short-term industry environment is weak, with the end of the new crown epidemic, the economy will recover to prosperity in the next 2-3 years, and the expansion of raw material equipment and cost reduction will enable polycarbonate to reduce material costs and increase profit margins. In addition, the emergence of new domestic polycarbonate applications will increase the amount of polycarbonate in this field. At the same time, the price and profit margin of polycarbonate in new applications will be higher.