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Asia and Europe Navigate Demand Dips and Geopolitical Strife Sparks Market Concerns for Phenol
Asia and Europe Navigate Demand Dips and Geopolitical Strife Sparks Market Concerns for Phenol

Asia and Europe Navigate Demand Dips and Geopolitical Strife Sparks Market Concerns for Phenol

  • 19-Jan-2024 1:56 PM
  • Journalist: Bob Duffler

Hamburg, Germany: In recent market movements, Phenol prices have displayed varying trends in Asian and European regions, driven by different demand and production dynamics. Weak downstream demand and reduced production activities have been key factors influencing Phenol prices in the Asian and European markets, respectively. Throughout 2023, tepid demand from downstream industries like Bisphenol A has dominated market sentiments, affecting Phenol prices on a broader scale. Meanwhile, global geopolitical developments have impacted crude oil prices, with escalating tensions in the Middle East driving a sharp increase. The US strikes on Houthi targets in Yemen and subsequent Pakistani military strikes on separatist targets in response to actions by Iran have contributed to this upward movement. Additionally, unexpected rises in US crude inventories reported by the American Petroleum Institute (API) have affected the supply side of the oil market.

According to the ChemAnalyst database, the prices of Phenol have plummeted by approximately USD 60 per ton across the major Asian markets. Market players have reported that inquiries from downstream Bisphenol A industries remained lackluster. Phenol market players were cautious about inventory replenishment as global demand remained subdued amidst weakness in the construction sector across Western markets.

On the other hand, in the European market, the price relations of Phenol have accelerated as January progressed. Production activities contracted followed by subdued terminal demand. According to market sources, inflationary pressures surged at the close of the fourth quarter, marked by companies reporting their most significant rise in output prices in seven months. This increase was driven by a notable uptick in average costs. The intensifying inflationary environment poses challenges for Phenol businesses, impacting their pricing strategies and potentially affecting consumer purchasing power. Central banks and policymakers are closely monitoring these developments, aiming to strike a balance between supporting economic growth and managing inflationary risks.

According to the pricing intelligence of ChemAnalyst, Phenol prices are expected to settle higher toward the end of the first month of 2024. Demand from the Chinese market might escalate before the Lunar New Year Holidays and contribute to bullish market sentiments. In addition, ongoing conflicts in Ukraine and Gaza are expected to contribute to uncertainties as long as they persist, with the oil market closely monitoring the current attacks on shipping by Yemeni rebels. These developments are likely to add to the complexities and challenges faced by the upstream Crude Oil market, further translating into price development for Phenol across the regional markets.

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