The production capacity burst BPA halo is no more

This year, bisphenol A production capacity continued to expand sharply, market volume increased prices decreased, profit margins shrank sharply, and even lost money
in mid-to-early December.
The author believes that the production capacity will continue to be released in 2023, the bisphenol A market may continue to struggle near the cost line, and the contradiction between supply and demand is difficult to solve
in the short term.

The pace of capacity release does not stop
.
In the first half of this year, Zhoushan Green Petrochemical 230,000 tons/year bisphenol A plant was put into operation, and Cangzhou Dahua 200,000 tons/year bisphenol A plant was put into operation; In the fourth quarter, the first phase of Luxi Group's 1.
2 million tons/year bisphenol A project of 200,000 tons/year, and Wanhua Chemical's 480,000 tons/year bisphenol A production line were put into operation
as planned.
So far, the total output of bisphenol A in China is expected to reach about
2.
4 million tons.
In 2023, the production capacity of bisphenol A will continue to expand, and the total production capacity will reach 4.
405 million tons, and the market supply is sufficient
.

The double decline in price profit is a foregone
conclusion.
Looking back at 2021, the average price of bisphenol A reached 22,600 yuan (ton price, the same below), and the highest price once stood at the 30,000 yuan mark, a new high
in nearly 20 years.
The profit of bisphenol A production enterprises is even more impressive, especially in the first four months, the theoretical profit of bisphenol A production enterprises is as high as 18,000 yuan, although the subsequent theoretical profit has narrowed, but the average profit for the whole year is still close to 10,000 yuan
.
Looking at the bisphenol A market this year, the market continued to fluctuate downward, especially in December, the price fell sharply, approaching the 10,000 yuan mark, and the annual average price was 14,700 yuan, down 34.
4%
year-on-year.
At the same time, the profit space of the industry has also been narrowing, and even the cost inversion is near the end, with an average gross profit of 2,574 yuan, down 76.
5%
year-on-year.
Compared to last year, today's BPA market is not the same
.

An important factor in the situation of the bisphenol A market is the intensification
of the contradiction between supply and demand.
At present, the matching rate of bisphenol A and downstream is 94%, of which the matching rate with downstream polycarbonate (PC) is 62.
5%, and the matching rate with downstream epoxy resin is 31%.

However, this year, affected by multiple factors such as the impact of the epidemic and changes in the external environment, insufficient demand has become a prominent contradiction in economic operation.
PC and epoxy resin starts are less than expected, resulting in the overall oversupply of bisphenol A, and the pressure on production and sales in the industry is difficult to decrease
.

In the future, with the gradual liberalization of epidemic control, domestic demand is expected to recover, but it is
more difficult for infrastructure investment to maintain high growth.
Overseas recession concerns still exist, and the continued slowdown in external demand is still a general trend
.
At the same time, the planned and planned production capacity of bisphenol A in the next five years will exceed 5 million tons, the new production capacity of downstream PC will slow down, and there will still be some uncertainty
in the capacity utilization rate of epoxy resin.
In addition, in 2023, the new production capacity of phenol ketone, the raw material phenol A will be more than 2 million tons, and the new production capacity of three sets of 1.
95 million tons/year will be stable in the fourth quarter of this year, and the raw material support will also weaken.

Market participants believe that in the interweaving of long and short, the contradiction between the supply and demand of bisphenol A may be difficult to straighten, the price will run near the cost line, and the former halo of bisphenol A is no longer there
.