Trading activity remained sluggish ahead of the holiday, and the Bisphenol A (BPA) market is expected to remain firm following the break.

Lead-in: Before the holiday, the Bisphenol A (BPA) market remained generally stable. Downstream users showed little willingness to stock up, primarily consuming existing raw material inventories. However, producers faced limited inventory pressure at month-end and focused mainly on fulfilling orders, resulting in a relatively balanced supply-demand landscape and prices consolidating within a narrow range. Inventory accumulation during the holiday is expected to remain manageable, with pressure likely limited. Post-holiday, downstream restocking expectations combined with a cautiously optimistic trend in the raw materials market suggest BPA will trade firmly. Key factors to watch include downstream restocking sentiment, crude oil price fluctuations during the holiday, and factory inventory levels.

I. Pre-Holiday Market Review

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Table 1: Domestic BPA and Related Product Price List (Unit: CNY/ton)

In the period leading up to the National Day holiday, the BPA market experienced limited volatility. Downstream interest in stocking was minimal, with most parties adopting a wait-and-see approach. BPA producers faced no significant inventory pressure, while traders lacked motivation for active operations, maintaining a steady mindset. Consequently, the market continued its stable trend.

Raw Materials Market: The phenol market saw prices decline initially before rising ahead of the holiday. Weak demand follow-through led to early softness; however, sustained strong gains in pure benzene costs, coupled with price hikes from some phenol plants, improved supplier sentiment and prompted aggressive offer prices. Nevertheless, as the holiday approached, end-user procurement slowed, resulting in moderate trading activity. Conversely, the acetone market trended downward pre-holiday. Low downstream engagement led some Shandong manufacturers to lower their opening prices, dampening market sentiment. Traders, feeling pressured, increased their willingness to sell and accelerated shipment pace, causing the overall transaction center to continue falling.

Downstream Markets: The epoxy resin market declined pre-holiday due to low purchasing enthusiasm and thin trading atmosphere. Producers faced shipping pressure and lowered opening prices, dragging down the market center. Similarly, Polycarbonate (PC) prices retreated. Lack of fundamental support left participants bearish and cautious, with strong willingness to sell at prevailing market rates. However, downstream stocking before the double holidays (National Day/Mid-Autumn) was scarce, with only essential rigid demand purchases, leading to weakening trading momentum.

II. Analysis of Margins and Capacity Utilization

Table 2: Domestic BPA and Related Product Data List (Unit: CNY/ton)

In the week preceding the National Day holiday, the operating rate in the BPA industry increased. Both Nantong Xingchen and Wanhua Chemical restarted their BPA units, which are now running normally. Meanwhile, major downstream industries showed mixed trends: the decline in epoxy resin operating rates outweighed the slight increase in PC operating rates, resulting in a marginal quarter-on-quarter decrease in total consumption.

Regarding profitability, both BPA and its downstream sectors were generally in loss territory before the holiday. However, BPA industry margins recovered slightly, primarily driven by cost-side concessions. Since BPA market prices remained stable, this cost relief allowed for some repair of industry profits.

III. Post-Holiday Outlook

Table 3: Forecast of Domestic BPA Capacity Utilization Rates

Post-holiday, PC industry operating rates are expected to rise. While epoxy resin operating rates may decline, the inclusion of Hunan Petrochemical’s new 150,000 tons/year capacity sample will drag down the average utilization level. For BPA, previously idle units are operating normally, and Shandong Fuyu Petrochemical is expected to resume normal operations after the holiday. Consequently, BPA operating rates are projected to increase, though factory inventory levels during the holiday require close monitoring.

Conclusion: The probability of a firm BPA market post-holiday remains high. Although BPA supply is increasing, most enterprises were primarily fulfilling prior orders before and during the holiday, suggesting that inventory buildup at factories during the break will be limited and social inventory pressure post-holiday will be manageable. With PC operating rates rising and epoxy resin rates falling, but downstream stocking intentions being virtually nil before the holiday, there is an expectation for partial downstream entry into the market for restocking after the break. This should drive a slight short-term recovery in BPA transactions. On the cost side, the phenol market is expected to remain cautiously optimistic, while the acetone market faces pressure from high levels, providing overall cost support for BPA. Regarding sentiment, although total BPA supply increases in October, end-user orders are expected to be mediocre, leading to shorter procurement cycles and persisting short-term supply-demand contradictions. Close attention should be paid to production and sales of major BPA manufacturers, upstream/downstream fluctuations, and international crude oil prices post-holiday.