SunSirs: The Phenol Market Fell Sharply in October due to Weak Demand

Price trend

The domestic phenol market continued its downward trend in October. Following the National Day holiday, market participation was limited, downstream purchasing activity was weak, and traders experienced sluggish sales. Prices fell by 300 RMB/ton in three working days, indicating a significant market decline. The market remained weak in the latter half of the month, bottoming out again. According to data monitored by SunSirs, in the East China market, the domestic phenol price was 6,820 RMB/ton on October 1st and 6,450 RMB/ton on October 30th, a decrease of 5.43%. Similar fluctuations were observed in all major markets across the country.

Market Analysis

With both raw material prices declining, there was a lack of cost support. Looking at the benzene market, local refineries are seeing relatively good sales, the Shandong-East China arbitrage window remains open, imports are increasing, supply is ample, and the market is bottoming out. It is expected that domestic plant production cuts in November will likely boost the market.

October output was 478,500 tons, up 9% month-on-month; a total of 6 units underwent maintenance in October, involving a total capacity of 1.2 million tons.

Downstream end-user factories showed weak buying interest, with low willingness to submit offers for immediate needs and insufficient follow-up transactions. Looking at the downstream bisphenol A market, prices generally declined, with low inventory pressure and a downward trend.

As of October 31st, the phenol offer situation in major markets across the country was as follows:

Market outlook

Looking ahead, regarding the equipment, Zhejiang Petrochemical Phase I and Ningbo Formosa Chemicals' phenol-acetone units are expected to undergo shutdowns for maintenance in the next phase, while Fuyu Chemical is scheduled to resume operations as planned. Saudi Arabian contracts are expected to arrive at port around early November, so overall supply is likely to decrease. On the demand side, phenolic resin demand is mainly for immediate needs, and there is little expectation of an increase.

According to SunSirs, traders will still face significant pressure, and the market may continue to bottom out next month. However, given the weak one-sided market trend, there may be another period of cyclical price increases and fluctuations.

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