Chinese market witnessed a wavering trend in Phenol prices

The prices of Phenol have been showcasing a fluctuating trend in China since last month. This see-saw movement has been owing to the strong feedstock Benzene and Propylene market. Phenol prices rose marginally in the third week of March and dropped in the following week. 

Phenol, being the major raw material in the production of Bisphenol A, is used extensively in the manufacturing of downstream polycarbonates and epoxy resins. The commodity prices were thus affected by the increasing demand for PVC and epoxy resins from end-use automotive and electronics industries, causing the Chinese prices to settle at USD 1690/tonne for Phenol CFR Qingdao in the week ending 1st April.

Furthermore, the resurgence of the COVID outbreak in China has led to the shutting down of certain cities, particularly the global financial hub, Shanghai. This has severely hampered the trading activity of downstream automotive and chemical industries, leading to a decline in demand. The upstream crude oil prices dropped when US president Joe Biden announced the release of the country’s oil reserves.

Severe lockdown restrictions have affected the downstream electronic and electrical industry with transportation constraints resulting in delayed imports and exports and the warehouse shutdown. As China has the highest Phenol production plants, the closure of markets and warehouses has led to the disrupted supply chain and destructed the demand from the domestic market.

As per ChemAnalyst,” The prices of Phenol in China may continue to fall with the declining upstream Crude oil futures which are affecting the feedstock Benzene and Propylene market. Shrinking downstream furniture market might also affect the Phenol prices. Disruption in the Chinese trading activities, high inventory levels have also contributed to the price decline across the region.”