Global Phenol and Acetone Market Forecast for the Second Half of 2024: Supply-Demand Imbalance, Changing Trade Patterns and Extreme Weather Challenges

Market analysts pointed out that the global phenol and acetone market prices are expected to remain low in the second half of 2024. From the supply side, Asia and Europe are well supplied, while the United States acetone and methyl methacrylate (MMA) market is facing supply tensions, and the overall supply and demand pattern is tending to balance. However, weak demand in the downstream market and low purchasing willingness in the industrial chain are expected to lead to a weak cycle in the acetone and phenol markets.

For the North American market, the industry forecasts that phenol demand will remain stable in the second half of 2024, but the demand will be weak due to macroeconomic inflationary pressure and the rising cost of raw benzene. The phenol market may face competitive pressure from imported products. As A key raw material for the production of epoxy resins, bisphenol A accounts for more than one-third of total phenol demand in North America, and the recent anti-dumping investigation against Asian epoxy resins may trigger changes in trade patterns, which will affect price trends. In addition, the impact of the upcoming hurricane season on the market cannot be ignored.

Acetone market prices are expected to remain stable with limited fluctuation. The low operating rate of phenol and limited stock supply continue to put pressure on acetone production. While imports are expected to support acetone supply, continued high freight rates between the U.S. and Asia will curb arbitrage opportunities and prices are not expected to decline significantly.

Due to insufficient imports of phenol, the US MMA market supply is expected to remain tight, and suppliers believe that demand recovery is insufficient. With the production of Rohm's 250,000-ton/year ethylene feedstock acetone plant, MMA production capacity in the United States is expected to increase.

In the European market, acetone and phenol demand is expected to remain low, and market participants do not observe clear signs of recovery. Despite extensive overhauling of phenol capacity in Europe, supply still meets demand; Acetone supplies are relatively limited. The shutdown of the Ineos Antwerp plant is expected to allow other European producers to operate at a higher load rate, with a healthier performance in practice despite a lower theoretical run rate. The US is expected to remain Europe's main export channel, especially if the arbitrage window opens.

The European MMA market is heavily dependent on imports, and if Chinese prices fall, the arbitrage window could reopen, driving more goods to Europe. Polycarbonate demand is expected to remain stable or slow at least until August, with increased uncertainty at the end of the year.

Market analysis shows that with the increase of production capacity in Asia, especially Northeast Asia, this region will become an important export base for phenol and acetone. The Indian phenol market is likely to remain well supplied, but prices are vulnerable to upstream feedstock benzene costs. Demand for phenol is expected to be slightly depressed by weak demand in the downstream laminates, phenolic resins and agrochemicals industries. On the supply side, ample supply in India and abroad will maintain healthy inventory levels, putting downward pressure on prices. India's acetone demand is expected to remain strong due to tight global supply, supporting price levels. Demand for acetone in the paint and coatings and pharmaceutical industries is expected to remain stable.

In Northeast Asia, phenol and acetone producers are trying to rebalance the market with new production capacity. Exporters are aggressively expanding outside Asia, but high benzene prices have crimped producer profitability. Still, downstream markets in Asia are in good shape. Demand for BPA is growing as producers in Thailand and Singapore resume production. Polycarbonate exports are also expected to increase as new capacity comes on stream. The rise of Chinese polycarbonate in global demand reflects the underlying demand change. The high price of MMA in 2024 has inhibited the purchasing willingness of some Indian and Southeast Asian buyers. With the resumption of production of MMA units in Northeast Asia, MMA prices in China will fall, which is expected to promote the recovery of MMA trade in Asia.