China's Phenol Market Surges 62% in 9 Days

March 9th, News

Recently, the Chinese phenol market has "soared". According to the data, from March 1st to March 9th, the price of premium phenol in the East China region increased from 6,650.00 CNY/ton to 10,800.00 CNY/ton, a price increase of 62.41% in just 9 trading days, with unprecedented market enthusiasm.

Market Performance: Straight-line surge, with daily price increases repeatedly hitting new highs.

From the price trend chart, it can be clearly seen that the price of phenol showed an accelerating upward trend in early March in China:

March 1: The opening price was 6,650.00 CNY/ton. March 5: Prices broke through 8,000 CNY per ton, with a single-day price increase reaching 20.30%. March 9: The price reached 10,800.00 CNY per ton, representing a cumulative increase of 62.41% compared to the beginning of the month.

This nearly "straight-line rise" trend has also been frequently seen in the Chinese chemical market recently.

Middle East geopolitics + crude oil - pure benzene linkage, with cost rigid support fully in place

The escalation of conflicts in the Middle East has led to disruptions in the passage through the Strait of Hormuz, increasing global concerns over crude oil supply and pushing international oil prices up to $115 per barrel. The production cost of phenol is 65%-70% derived from benzene, forming a strong transmission chain of "crude oil → naphtha → benzene → phenol." Recently, the price of benzene has also surged significantly. Coupled with some plant maintenance, the cost support is robust, leading major Chinese companies to raise their listed prices.

March 9, Sinopec North China phenol listed price increased by 3,400 to 12,000 CNY/ton for cash on delivery, effective from March 9.

March 9, Sinopec East China phenol listed price increased by 3,400, to 12,000 CNY/ton for cash on delivery, effective from March 9. Affiliated companies such as Zhenhai Refining & Chemical and Gaoqiao Petrochemical will uniformly implement this price.

March 9, Longjiang Chemical increased the phenol price by 2,200 to 12,200 CNY/ton, effective on the 9th. The company's 350,000 tons/year phenol and acetone unit is operating at full capacity, with phenol prioritized for internal use, and external sales mainly through contracts. Inventory levels are not high.

On March 9, Lihuayi Weiyuan Chemical Co., Ltd. increased the ex-factory settlement price of phenol by 1,000 to 10,700 CNY per ton, effective from March 9. The company's two phenol and acetone units with a total annual capacity of 700,000 tons are operating normally, shipping according to plan, and inventory levels are not high.

March 9, Shandong Fuyu Petrochemical Co., Ltd.'s 250,000 tons/year phenol and acetone unit was operating normally. The price of phenol was increased by 1,000 to 10,500 CNY per ton. Inventory levels were moderate, and shipments were made according to plan.

China's supply contraction + market sentiment boost

Chinese phenol companies' plant maintenance has led to a supply contraction, compounded by a reduction in imported supplies due to the situation in the Middle East, exacerbating the shortage. At the same time, traders are holding back from selling, and downstream buyers are panic-buying to replenish their inventories, creating a "price increase → rush to buy → further price increase" cycle, amplifying the price increase.

Let's look at the situation: In the short term, phenol prices will remain high and volatile, with geopolitical situations and oil price trends being the core variables. As long as the conflict in the Middle East continues and navigation through the Strait of Hormuz is obstructed, international oil prices and pure benzene prices are likely to remain high. Coupled with the unrelieved supply contraction in China, the cost support for phenol and the tight supply situation will continue to keep prices at a high level.

But risks and opportunities coexist, and one must be cautious of market reversals and the backlash from the demand side. If the situation in the Middle East eases and oil prices drop rapidly, phenol may face a significant risk of a price correction; at the same time, high prices have severely squeezed the profit margins of downstream industries. If downstream demand substantially declines due to high prices, it will in turn constrain further price increases. It is recommended that production enterprises seize the opportunity to sell, traders manage risks rationally, and downstream users purchase according to their needs, avoiding blind stockpiling.