August 31 news
Price Performance
In August, phenol showed a trend of surging then declining, with the overall monthly focus downward. At the beginning of the month, the benchmark price was 8,500 CNY/ton, which briefly surged to 8,775 CNY/ton during the month before continuously retreating, and by the end of the month, it fell back to 8,110 CNY/ton, resulting in a full-month price decrease of about 4.59%. In the middle and late part of the month, several major manufacturers (Shenghong Refining, Jiangsu Ruiheng, Lihuayi Weiyuan) successively lowered their ex-factory listed prices, causing the spot trading focus to continuously decline.
1. Supply Side: As the maintenance period ends, production resumes, and the supply of goods increases.
- The phenol and acetone units that underwent concentrated maintenance in July in China were gradually restarted and increased their load in mid-to-late August. As a result, the industry's operating rate has risen from a low level, and the tight supply situation is gradually easing.
- Facilities such as Shenghong Refining & Chemical and Guangxi Huayi have resumed shipments, boosting China’s commodity supply; port arrivals remain stable, while pressure on social inventories is marginally increasing.
- Only a small amount of bisphenol A and its associated phenol and ketone facilities are undergoing short-term maintenance, which is not enough to offset the overall increase in supply in China.
2. Demand Side: Traditional Off-Season, Downstream Losses, Mainly Rigid Demand Procurement
- The downstream market for bisphenol A remained generally weak in August. Some plants halted operations for maintenance, putting downward pressure on the profitability of downstream epoxy resins and PC. As a result, downstream buyers showed strong resistance to higher phenol prices, opting instead to replenish stocks only on a limited, demand-driven basis and firmly refusing to chase price increases. Phenolic resins, alkylphenols, and other downstream sectors are in the off-season, with factories operating at low capacity, and there is generally a lack of willingness to actively replenish inventories.
- During the high-price phase, transactions were sluggish, and the pressure on traders to sell increased, leading to price reductions to promote sales.
3. Cost End: Weak Support from Benzene, Insufficient Cost Bottoming Strength
Upstream raw material benzene saw significant fluctuations during the month, with a rapid decline after a sharp rise, and the cost side did not provide sustained strong support; the geopolitical benefits for oil prices were short-lived and could not continuously push up the cost line for phenol and acetone. Phenol lacked sufficient momentum to rise, and after losing cost protection at high levels, it came under pressure to decline.
In the mid to late August, negative and stagnation warning signals appeared multiple times on the 5/10/20 day moving average, with prices falling from the mid-high levels of the year. The premium of spot prices over factory/ raw material prices narrowed, and the market shifted from holding back sales to support prices to selling for cash. The sentiment of traders turned from strong to weak.
Summary
The August market trend essentially reflects the realization of short-term positive effects stemming from previous maintenance shutdowns, leading to a renewed shift toward a looser supply-demand balance: recovering supply, weak demand during the off-season, and weakening cost support—all these factors are jointly driving phenol prices lower throughout the month. Going forward, key areas to watch include phenol-ketone companies’ maintenance schedules, the pace of resumption of BPA production, and fluctuations in pure benzene prices.
