Price trend:

In the fourth quarter of 2025, the domestic phenol market experienced a significant downturn, with prices continuously falling from their high levels at the beginning of the quarter, reaching the lowest point of the year and even the past five years. The industry faced a double dilemma of supply-demand imbalance and pressure on profits. This market decline was the result of a combination of negative factors, including supply-demand mismatch, weakened cost support, and transmission effects throughout the industrial chain, significantly impacting phenol and its upstream and downstream industries. According to data monitored by SunSirs, the price of domestic phenol in the East China market was 6,912 RMB/ton on October 1st, and 5,845 RMB/ton on December 26th, a decrease of 15.44%.

Market Analysis

On a year-on-year basis, the average annual price of phenol in 2025 was 6,850 RMB/ton, a decrease of 1,064 RMB/ton compared to 7,914 RMB/ton in 2024, representing a decline of 13.44%. The significant decline in the fourth quarter was the main factor dragging down the average annual price. In terms of market transactions, affected by low prices and weak demand, end-users showed little enthusiasm for inquiries, and transactions remained sluggish. Most companies primarily relied on contract shipments, and the spot market trading atmosphere was subdued.

From a cost perspective, the core raw materials for phenol production are benzene and propylene.  In the fourth quarter, the market prices of both materials weakened simultaneously, leading to insufficient cost support for phenol and further exacerbating the price decline. The benzene market was particularly weak, continuing to fall by more than 8% from September to October. The sluggishness in the benzene market was mainly due to the contradiction between a surge in imports and insufficient downstream demand. The propylene market also showed a downward trend, with average monthly prices in Northeast and North China falling below 6,000 RMB/ton, reaching a new low for the year.

On the supply side, the phenol industry was experiencing a new round of capacity expansion in 2025. By the end of the third quarter, Jilin Petrochemical's 350,000 tons/year phenol-acetone plant had been completed and put into operation. After entering the fourth quarter, the plant maintained stable output, directly increasing the total market supply. At the same time, phenol-acetone plants such as those of Mitsui Chemicals and Shenghong Refining & Chemical, which had been shut down for maintenance, gradually restarted, and the industry's operating rate recovered to a stable level of around 75%, further exacerbating the oversupply situation. In addition, phenol imports into East China continued in the fourth quarter, with total arrivals reaching 49,700 tons in December. Although port inventories remained stable at 8,500 tons, the expected arrival of subsequent shipments continues to put pressure on the market.

From the demand side, the overall market downturn was the main reason for the market decline. Phenol's core downstream product is bisphenol A, which accounts for over 40% of its consumption.  However, the downstream industries of bisphenol A, namely polycarbonate (PC) and epoxy resin, both faced weak demand in the fourth quarter. Specifically, the PC industry saw limited new orders, with companies mainly stocking up on small orders to meet immediate needs. Operating rates decreased by 4 percentage points compared to September, leading to a significant reduction in bisphenol A purchases. The epoxy resin industry, affected by adjustments to new wind power policies (onshore wind power no longer enjoys VAT refund incentives), maintained an operating rate of only around 51%, further reducing its enthusiasm for raw material procurement. This weak demand from downstream industries created a negative feedback loop, resulting in a lack of effective support for the phenol market and continuously increasing downward pressure on prices.

As of December 26th, the quoted prices for phenol in major markets across China were as follows:

Market Outlook

Sinopec expects that the domestic phenol market will continue to face downward pressure and volatility in the short term, with limited room for price increases. From the supply side, there are plans to restart phenol and acetone plants, such as those at Yangzhou Shiyou, and the continued arrival of overseas and domestic shipments will likely lead to a slight increase in market supply, thus suppressing prices. On the demand side, demand for the core downstream product, bisphenol A, is expected to decrease slightly, and other downstream industries will continue to prioritize cautious, need-based purchasing, lacking the willingness to actively build up inventory. Therefore, demand is unlikely to provide significant upward momentum in the short term. In the short term, the industry will continue to face pressure, and companies need to focus on inventory control and cost management; in the long term, the high-quality development of the industry depends on capacity optimization, technological upgrades, and the steady recovery of downstream demand.

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