June 30 news
In June, the market price trend for phenol was clear, with prices at the beginning and end of the month being basically the same. At the beginning of the month, the market was stable, with a benchmark price of about 7,380 CNY per ton, and downstream demand was limited to essential purchases. In the first ten days, major refining and chemical companies in China collectively maintained and increased their listed prices, which boosted the sentiment in the spot market, causing prices to quickly rise to a monthly high of 7,800 CNY per ton, and market transactions were briefly active.
After prices surged to a high point, upward momentum waned, and market conditions continued to decline in the mid-to-late part of the month. High prices restrained downstream purchasing, and coupled with the gradual easing of supply in the market, many companies lowered their quoted prices. As of June 29, the benchmark market price had fallen back to 7,500 CNY per ton, while the spot reference price stood at 7,450 CNY per ton—returning to the core range seen at the beginning of the month. For the entire month, prices saw a slight increase of 0.95%, with overall fluctuations remaining limited.
1. Early month price increase: Manufacturers holding prices firm + slight cost support
The price increase in the first ten days of the month was mainly due to companies holding firm on prices and a slight support from costs. At the beginning of the month, local maintenance of phenol and acetone facilities led to a temporary tight supply, with factories having low inventory and a strong intention to hold prices firm. At the same time, the price of upstream pure benzene stabilized, coupled with the demand for recovery from previous market overcorrection, which pushed the price of phenol to rise temporarily.
2. Decline in mid-to-late February: Loose supply + weak terminal demand
In the middle to late part of the month, the market trend reversed and declined, with the core reason being the weakening of the supply and demand balance. On the supply side, previously shut-down facilities resumed operations in a concentrated manner, leading to an increase in industry operating rates. This, combined with the release of new production capacity, resulted in a continuous loosening of supply and a slow accumulation of inventory, completely offsetting the previous tight supply benefits.
Demand-side weakness is evident in the off-season, with low operating rates and high finished goods inventory in downstream industries such as bisphenol A and phenolic resins. Only essential restocking is maintained, with no support from concentrated inventory buildup. High prices further dampen purchasing enthusiasm, leading to weak market transactions and traders reducing prices to move inventory. Additionally, the weakening of pure benzene prices within the month has led to the loss of cost support, accelerating the price correction of phenol.
Overall, the phenol market in June showed a pattern of weak cost support, ample supply, and weak demand. Short-term plant maintenance and companies holding firm on prices provided some minor benefits, but the dominant negative factors were the low demand during the off-season and the loose supply, ultimately leading to a rise followed by a decline. The overall market demonstrated considerable resilience, without experiencing a significant one-sided drop, and merely maintained a range-bound fluctuation.
Looking at the short term, the weak market situation for phenol in China is unlikely to change, with high production levels and ample supply. On the demand side, the off-season effect continues, and downstream operations are struggling to recover, leaving the market without upward momentum. It is expected that the market will maintain a narrow fluctuation between 7,400-7,600 CNY/ton. In the future, close attention should be paid to the price of benzene, the maintenance schedules of major plants, and the progress of downstream resumption, as these factors will dominate the market trend.
