According to SunSirs, China's phenol market exhibited a softening trend this week, driven by subdued pre-holiday demand and futures pre-sales, leading to a slight price decline. In East China, a key market indicator, prices fell from 6,986 RMB/ton on September 21 to 6,873 RMB/ton on September 26, a 1.62% drop. Pre-holiday futures prices dipped as low as 6,800 RMB/ton, dragging spot market sentiment, with similar declines observed across major regions. This reflects a cautious market stance ahead of the holidays, with insufficient trading volume amplifying downward pressure.

Supply Side: Supply pressure remained manageable. Early in the week, Jiangyin port phenol inventory dropped to 7,000 tons, with limited domestic trade shipments (total shipments at 27,200 tons, with 24,200 tons delivered and 3,000 tons in transit). This prevented significant inventory buildup, capping further price declines. Sinopec East China's listed price held steady at 7,050 RMB/ton, but potential post-holiday adjustments warrant attention. Limited imports and domestic shipments provided a buffer, avoiding panic selling from oversupply.

Demand Side: Weak demand dominated. Downstream bisphenol A demand expectations weakened, and pre-holiday pre-sales remained low, with reduced terminal purchases as stockpiling tapered off. Despite phenol’s wide use in coatings, pharmaceuticals, and plastics, sluggish macroeconomic recovery and holiday factors curbed demand growth. SunSirs’ benchmark price on September 26 was 6,910 RMB/ton, up 2.52% from early September but down 0.38% daily, indicating heightened short-term volatility.

Regional Pricing: Price movements varied. As of September 27, East China quoted 6,880 RMB/ton (down 100 RMB/ton), reflecting significant demand weakness. Shandong and Yanshan areas both quoted 7,050 RMB/ton (down 50 and 20 RMB/ton, respectively), while South China stood at 6,970 RMB/ton (down 50 RMB/ton). On September 26, East China fell 20 RMB/ton to 6,880, Shandong rebounded 50 RMB/ton to 7,020, Yanshan rose 30 RMB/ton to 7,050, and South China held at 7,000 RMB/ton. These variations stem from regional supply-demand imbalances, with North China relatively stable and South China more affected by downstream chains.

Outlook: Post-holiday supply is expected to rise slightly, with focus on Jilin Petrochemical’s new phenol-ketone facility and incoming shipments. Limited spot replenishment may persist, but bisphenol A demand could recover, while other downstream purchases may decline. Cost-side support is uncertain, with benzene and acetone prices unclear. Accelerated shipments could push prices lower, while delays might spark a rebound. The market is likely to remain weak short-term. Stakeholders should monitor inventory and downstream orders closely and prepare post-holiday procurement strategies to navigate volatility.

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