SunSirs: The Domestic Phenol Market Surged 62% in 9 Days

Price trend

Recently, the domestic phenol market has seen a dramatic surge. According to data from SunSirs from March 1st to March 9th, the price of premium-grade phenol in East China jumped from 6,650.00 RMB/ton to 10,800.00 RMB/ton, a 62.41% increase in just nine trading days, indicating unprecedented market activity.

Market performance: A sharp rise, with daily gains repeatedly hitting new highs.

The price trend chart clearly shows that phenol prices accelerated their upward trend in early March.

March 1st: Opening price was 6,650.00 RMB/ton.

March 5th: Price broke through 8,000 RMB/ton, a single-day increase of 20.30%.

March 9th: Price reached 10,800.00 RMB/ton, a cumulative increase of 62.41% compared to the beginning of the month.

This near-vertical upward trend has been frequently observed in the chemical market recently.

Middle East geopolitical factors, coupled with the correlation between crude oil and benzene prices, provided strong rigid cost support

Escalating conflict in the Middle East has disrupted passage through the Strait of Hormuz, fueling global oil supply panic and pushing international oil prices to $115 per barrel. 65%-70% of phenol production costs come from benzene, and together with crude oil, they form a strong transmission chain: "crude oil → naphtha → benzene → phenol." Recently, benzene prices have surged in tandem, coupled with maintenance shutdowns at some plants, resulting in strong cost support and prompting major companies to raise their list prices.

On March 9, Sinopec North China raised its listed price for phenol by 3,400 RMB/ton to 12,000 RMB/ton for cash on delivery, effective from March 9.

On March 9, Sinopec East China raised its listed price for phenol by 3,400 RMB/ton, setting the price at 12,000 RMB/ton for cash on delivery. The price was effective from March 9 and was uniformly applied by its subsidiaries Zhenhai Refining & Chemical and Gaohua Materials.

On March 9th, Longjiang Chemical raised its phenol price by 2,200 RMB/ton to 12,200 RMB/ton, effective immediately. The company's 350,000-ton/year phenol-acetone plant was operating at full capacity, prioritizing internal use and relying mainly on external sales contracts; inventory levels were low.

On March 9th, Lihua Yiweiyuan Chemical Co., Ltd. raised its ex-factory settlement price for phenol by 1,000 RMB/ton to 10,700 RMB/ton, effective March 9th. The company's two phenol-acetone plants, totaling 700,000 tons/year, are operating normally, shipping according to plan, and inventory levels were low.

On March 9, Shandong Fuyu Petrochemical Co., Ltd.'s 250,000-ton/ton phenol-acetone unit was operating normally. The price of phenol was increased by 1,000 RMB/ton to 10,500 RMB/ton. Inventory was at a normal level, and shipments were being made according to plan.

Domestic supply contraction and market sentiment boosted

Domestic phenol plant maintenance shutdowns led to a supply contraction, coupled with reduced imports due to the Middle East situation, exacerbating the shortage. At the same time, traders were reluctant to sell, and downstream buyers panicked and replenished their inventories, creating a cycle of "price increases → panic buying → further price increases," amplifying the overall price hikes.

Market Outlook:

According to SunSirs, phenol prices will remain high and volatile in the short term, with geopolitical tensions and oil price trends being the core variables. As long as the Middle East conflict continues and navigation in the Strait of Hormuz remains disrupted, international oil prices and benzene prices are likely to remain high. Coupled with the unresolved domestic supply contraction, the cost support and tight supply situation for phenol will continue to support prices at high levels.

However, risks and opportunities coexist, and we must be wary of market reversals and a backlash from the demand side. If the situation in the Middle East eases and oil prices fall rapidly, phenol may face a significant risk of further price declines. At the same time, high prices have severely squeezed downstream profit margins; if downstream demand shrinks substantially due to high prices, it will, in turn, constrain price increases. We recommend that manufacturers seize sales opportunities, traders rationally manage risks, and downstream users purchase only as needed, avoiding blind stockpiling.

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