October Demand Weak, Phenol Market Plummets in China

October 31, news

In October, the Chinese phenol market continued to weaken. After the National Day holiday, market participation was limited, and downstream purchasing enthusiasm was poor. Traders had difficulty selling, and the price decreased by 300 CNY/ton over three working days, leading to a significant downward trend. In the latter part of the month, the market remained weak and bottomed out again. According to monitored data, in the East China market, the price of phenol in China on October 1st was 6820 CNY/ton, and on October 30th, it was 6450 CNY/ton, a decrease of 5.43%. Major markets across the country showed similar fluctuations.

With both raw material prices declining, the cost side lacks support. In the pure benzene market, local refineries are seeing robust trading activity, and the arbitrage window between Shandong and East China remains open. Meanwhile, increased imports are contributing to a generally relaxed supply situation as the market is poised to bottom out. Looking ahead, China's planned production cuts in November are expected to boost market sentiment.

October production reached 478,500 tons, representing a 9% increase from the previous month. In October, a total of six units underwent maintenance, collectively affecting a production capacity of 1.2 million tons.

Downstream terminal factories show weak buying interest, with low intentions for rigid demand bids and insufficient transaction follow-up. In the domestic bisphenol A market, there is an overall decline, with not much inventory pressure, and the focus is on a downward trend.

As of October 31, the phenol quotations in major markets across China are as follows:

Looking ahead, on the supply side, Zhejiang Petrochemical's Phase I and Ningbo Taihua's phenol-ketone units are expected to undergo planned shutdowns for maintenance next period. Meanwhile, Fuyu Chemical is set to resume operations as scheduled. Additionally, the Saudi Arabian contract is anticipated to arrive in port around early November, potentially leading to an overall reduction in supply. On the demand side, phenolic resins continue to be driven primarily by essential, rigid market needs, with little expectation of significant growth.

Traders are expected to remain under significant pressure, and the market may continue to bottom out next month. However, given the lack of strong one-sided trends, periodic rallies and volatile fluctuations could reappear in the interim.