Rising prices of bisphenol A in Asia

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　　Driven by favorable factors such as rising prices of benzene and propylene, as well as supply constraints resulting from improving demand, spot prices of bisphenol A in Asia have been on the rise recently. In China, the main market for bisphenol A in Asia, relaxed credit conditions have led to an increase in speculative purchasing activities, which has also contributed to rising prices. 　　Rising raw material prices are one of the factors driving up the price of bisphenol A. A South Korean manufacturer said that due to the rising price of benzene, a price difference of at least 500 dollars per ton between bisphenol A and benzene is necessary to avoid losses. Last week, the price of raw benzene in South Korea was $440–450 per ton (FOB), which represents a increase of over 50% compared to the prices in South Korea at the beginning of December 2008. It is understood that as manufacturers strive for higher profits, the delivery price of bisphenol A in Asia has increased by $50–70 per ton recently, reaching $900 per ton (CFR main ports in China). 　　Analysis suggests that the growing market demand has also prompted manufacturers to raise the price of bisphenol A. On the one hand, the weak performance of the import market in November and December last year depleted the inventories in Asia’s major markets; these low inventory levels, combined with a high operating rate in the downstream epoxy resin industry, triggered a series of purchasing activities in recent weeks ； On the other hand, the simplified credit approval processes at the Bank of China, along with the influx of substantial amounts of liquidity into the spot market, have also stimulated people’s willingness to buy. 　　Although there is high demand for bisphenol A in the market recently, the operating rate of related production facilities remains low due to a shortage of the raw material benzene. A shortage in supply has also driven up the price of bisphenol A. Since December last year, propylene prices in Northeast Asia have risen by nearly 35%, reaching 650–700 USD/ton (CFR). Despite rising raw material prices, the price of bisphenol A declined by 11% during the same period. At the beginning of February in Northeast Asia, the price of bisphenol A was only 760–800 US dollars per ton, forcing producers of bisphenol A to operate at a loss. To avoid further losses, most manufacturers reduced the operating rate of their facilities. Furthermore, a seller said that the company’s operations were delayed due to technical reasons. The decrease in supply, coupled with end-users and traders replenishing their inventory after the Spring Festival, will further drive up the prices of bisphenol A.