Price trend:

Since December, the domestic phenol market experienced a significant decline followed by low-level fluctuations. Sinopec East China's listed price was 5,850 RMB/ton. According to data monitored by SunSirs, the price of phenol in the East China market was 6,225 RMB/ton on December 1st, and 5,850 RMB/ton on December 19th, a decrease of 6.02%.

Market Analysis

From a supply perspective, domestic phenol and acetone producers maintained a stable operating rate of around 75% during this period, without significant fluctuations. This stable capacity utilization means a relatively fixed market supply base, without sudden decreases or increases, which was one of the main reasons for the current narrow price fluctuations and the absence of extreme price movements. In December, the total volume of phenol shipments to East China reached 49,700 tons, of which 27,500 tons had arrived, and 22,200 tons were in transit. As of December 19, domestic shipments were not adding significantly to supply, and port inventories remained stable at 8,500 tons, indicating limited pressure on spot supply and providing some support for suppliers to maintain prices. However, the arrival schedule of subsequent shipments in transit will directly affect inventory levels, and the potential impact of shipping dynamics on the supply side needs to be continuously monitored.

From the demand side, downstream end-users showed limited interest in making inquiries and participating in the market. The main reason for the negative market sentiment this time was the lack of demand, with expectations of prices falling below 6,000 RMB/ton being realized ahead of schedule. Factories significantly lowered their listed prices, causing the market to repeatedly hit new lows for the year. As of December 19th, the market was affected by low prices, resulting in insufficient transactions and a further decline in prices.

As of December 19th, the quoted prices for phenol in major markets across China are as follows:

Market Forecast:

Sunsirs anticipates that the domestic phenol market will maintain a consolidation pattern in late December, with price fluctuations likely to remain within a narrow range and trading volume unlikely to see a significant increase.

There is a possibility of a slight increase in supply: on the one hand, Yangzhou Shiyou's phenol and acetone plant has a plan to restart, and a successful restart would increase market supply; on the other hand, replenishment from nearby and domestic shipments will continue. However, considering the support from the monthly average price level and the progress of suppliers' contract deliveries, the overall willingness to offer discounts is weak, and the price pressure brought about by the increased supply may be partially offset.

Demand lacks upward momentum: Core downstream bisphenol A demand is expected to decrease slightly, and other downstream industries are still purchasing cautiously based on essential needs, showing little willingness to proactively stock up on phenol. The weak end-user demand will continue to constrain price increases, making it difficult to generate effective upward price momentum.

Recent fluctuations in raw material prices have had a weak impact on the phenol market, making cost factors unlikely to be the dominant driver of market trends. The core conflict in the market in the coming period will still center on supply and demand, with the interplay between increased supply and weak demand determining the main direction of price movements.

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