SunSirs: Domestic Phenol Market Continud Downward Trend in April

In April 2026, the domestic phenol market continued its downward trajectory; overall market conditions briefly surged before rapidly retreating, causing the price center of gravity to steadily shift lower. The current downturn was driven primarily by supply-demand imbalances and external factors.

Throughout April, phenol prices generally followed a trajectory characterized by an initial slight uptick, followed by a continuous downward trend. At the beginning of the month—bolstered by geopolitical events involving attacks in Saudi Arabia and the support of the traditional "Golden March, Silver April" peak season—prices continued their upward momentum during the first week, ranging between 9,300 and 9,700 RMB/ton, while major enterprises simultaneously raised their ex-factory prices. On April 8, however, a sharp decline in crude oil prices, as well as in upstream benzene and propylene markets, triggered a correction in phenol prices; on that single day, prices fell by 2.24%, and by April 10, they had dropped 2.14% compared to the start of the month. From mid-month through the end of April, prices experienced a widespread, synchronized decline across key regions—specifically East China, Shandong, and South China. By the end of the month, mainstream domestic prices had settled within the 8,800–9,200 RMB/ton range, marking a significant drop from the highs recorded at the beginning of the month.

Cost-Side Support Collapsed

After trading at elevated levels early in the month, international crude oil prices plummeted sharply, dragging down the prices of key raw materials—benzene and propylene. With benzene recording a single-day decline of over 7%, cost-side support for phenol has completely collapsed, and downward pressure has become pronounced.

Weak Demand

Although downstream sectors—such as Bisphenol A and phenolic resins—maintain a level of essential demand, the high price of phenol has resulted in a sharp escalation of cost pressures for downstream enterprises. Consequently, companies have shifted their procurement strategies to strictly "buy-on-demand" for inventory replenishment; speculative demand has vanished, and the transmission of costs and market signals along the industrial chain has become obstructed, thereby creating a negative feedback loop.

Supply Side Operating at Elevated Levels

In April, the domestic capacity utilization rate for phenol and acetone remained at a high level, ranging between 86.0% and 86.5%. Although some overseas enterprises reduced their operating loads, the impact on the domestic market was limited; the stability of supply has consequently intensified pressure on market circulation.

According to SunSirs, short-term support from crude oil and feedstock prices remains limited, while downstream demand is unlikely to recover rapidly; consequently, the phenol market is expected to continue exhibiting weak, volatile trends. Although long-term opportunities exist for growth in exports and high-end demand, short-term market dynamics—characterized by supply-demand imbalances and weak cost support—are expected to remain the dominant factors. The market is projected to remain weak throughout May; therefore, close attention should be paid to developments regarding crude oil, downstream demand, and overseas supply.

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