Price Trends
In August, the phenol market experienced a trend of rising to a peak before falling back, with the overall price level trending downward throughout the month. The benchmark price tracked by SunSirs stood at 8,500 RMB/ton at the beginning of the month; after briefly climbing to 8,775 RMB/ton, prices underwent a sustained correction, eventually settling at 8,110 RMB/ton by month-end—a total decline of approximately 4.59%. During the latter half of the month, several major producers (including Shenghong Refining & Chemical, Jiangsu Ruiheng, and Lihuayi Weiyuan) successively lowered their listed ex-factory prices, causing the prevailing level of spot market transactions to drift steadily lower.
Fundamental analysis
1. Supply side: Maintenance periods have concluded, operating rates are rebounding, and the volume of available supply is increasing.
Phenol-ketone units that underwent scheduled maintenance in July successively restarted and ramped up operating rates in mid-to-late August; the industry operating rate rebounded from lows, and the tight spot market situation gradually eased.
Units such as Shenghong Refining & Chemical and Guangxi Huayi resumed shipments, increasing the volume of domestic commercial supply; port arrivals remained steady, while pressure from commercial inventories saw a marginal rise.
Only a small number of phenol-ketone units integrated with Bisphenol-A production underwent short-term maintenance, an impact insufficient to offset the overall increase in supply.
2. Demand side: Traditional off-season; downstream sectors are incurring losses, and purchasing is driven primarily by essential needs.
Demand from the primary downstream sector—bisphenol A—was generally weak in August; with some plants undergoing maintenance and downstream producers of epoxy resin and polycarbonate facing profit pressure, there was significant resistance to high-priced phenol, resulting in only small, as-needed purchases and a refusal to chase rising prices.
Other downstream sectors, such as phenolic resins and alkylphenols, were in their off-season; plant operating rates were low, and there was a general lack of willingness to actively restock.
Trading was sluggish at high price levels, increasing the pressure on traders to offload inventory; price concessions made to move stock drove the market downward.
3. Cost side: Support from benzene is weak, and the cost floor is insufficient.
Upstream benzene prices fluctuated widely during the month; after an initial surge, they fell rapidly, failing to provide sustained, robust cost support. Geopolitical factors briefly boosted oil prices but could not drive up the cost floor for phenol and acetone over the long term; consequently, phenol lacked upward momentum and retreated under pressure as high price levels lost cost-side support.
In the latter half of August, the spreads between the 5-day, 10-day, and 20-day moving averages repeatedly flashed warning signals of negative trends and stalled growth, causing prices to retreat from their mid-to-high levels for the year. The premium of spot prices over ex-factory and feedstock costs narrowed; market sentiment shifted from holding back supply to support prices toward offloading inventory for cash, and trader sentiment turned bearish.
Summary
The market trend in August essentially reflected the realization of short-term gains from earlier maintenance shutdowns, as supply-demand fundamentals shifted back toward a looser balance. A combination of recovering supply, sluggish demand during the off-season, and weakening cost support drove phenol prices downward throughout the month. Moving forward, key factors to monitor include maintenance schedules for phenol-acetone producers, the pace of operating rate recovery for bisphenol A (BPA) plants, and price fluctuations in benzene.
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