In July, the domestic phenol market experienced a general upward trend with rising price levels, decisively reversing the weakness seen in June. Market movements were characterized by narrow fluctuations early in the month, a surge in mid-month, and stabilization at high levels towards the end; supply-demand fundamentals improved during the period, trading activity steadily increased, and prices rose month-on-month.
In early the month, Shenghong Refining & Chemical raised its contract prices by 150 RMB/ton, boosting market sentiment regarding spot trading. This was compounded by the temporary maintenance of Jiangsu Ruiheng's 650,000-tonne/year core phenol-acetone unit on July 5; the resulting supply tightening—combined with low inventory levels—intensified the sense of spot scarcity. Market quotes rose across the board, with phenol prices rapidly breaching the 8,100 RMB/ton mark to hit a new recent high. By month-end, the upward momentum slowed and the market stabilized; mainstream quotes in East China held steady at 8,200–8,250 RMB/ton, with a monthly average of approximately 8,185 RMB/ton. Overall, fluctuations at the high price level narrowed, trading remained steady, and a strong market trend was firmly established.
1. Concentrated maintenance of production units has led to a significant contraction in supply. July and August mark the traditional maintenance window for phenol-ketone plants; this month, multiple units—both large and small—have undergone maintenance or operated at reduced loads, causing the industry's overall operating rate to decline. Coupled with a period of sustained destocking, social inventories remain low and spot market liquidity is tight; traders are strongly inclined to hold firm on prices, providing the core support for the upward market trend.
2. Downstream essential demand has rebounded, providing solid market support. This month, prices for key downstream products—such as bisphenol A and epoxy resins—have risen, and profit margins have improved; consequently, plant operating rates have steadily increased, driving a surge in essential procurement of phenol. Meanwhile, periodic restocking by end-use sectors such as coatings, electronics, and construction materials has effectively absorbed market inventory and tightened the supply-demand balance, thereby pushing phenol prices upward.
3. Firm raw material costs provide a floor for market prices. Prices for upstream feedstocks such as pure benzene and propylene have seen steady increases, keeping production costs high and firm; this effectively establishes a cost floor for phenol and limits downside potential. Coupled with rising bullish sentiment in the market, these factors support a continued strong market trend.
While the market generally showed strength, it lacked a trend of unilateral, rapid surges, primarily constrained by the sluggish recovery of end-user demand. Downstream enterprises largely replenished inventory based on immediate needs, maintaining a cautious stance toward stockpiling; a slowdown in high-priced transactions somewhat capped the extent of price increases, resulting in a market characterized by a tug-of-war between bullish and bearish forces and a trend of fluctuating upward movement.
According to SunSirs, in the short term—specifically early August—plant maintenance continues, maintaining a tight supply situation. Coupled with a steady recovery in demand, the phenol market is expected to remain strong at high levels, fluctuating within a narrow range with limited downside potential. From a medium- to long-term perspective, as maintenance units gradually resume operations from mid-to-late August, industry operating rates will rise and the supply gap will narrow; barring any unexpected demand-side boost, the market's upward momentum will likely slow, shifting into a phase of consolidation at high levels.
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