Phenol Prices Hold Steady in Europe in Mid-June, Consistent Rise in China Prices
Phenol Prices Hold Steady in Europe in Mid-June, Consistent Rise in China Prices

Phenol Prices Hold Steady in Europe in Mid-June, Consistent Rise in China Prices

  • 20-Jun-2024 3:39 PM
  • Journalist: Jung Hoon

Hamburg (Germany): For the past two weeks of June 2024, the prices of Phenol have shown a stable trend in the European market. The inquiries from the downstream construction sector have remained average keeping consumption rates on the lower side. Therefore, anticipating no improvement in sales volumes, manufacturers have chosen to avoid significant changes in Phenol prices. On the upstream front, despite declining Benzene prices, the Phenol market has remained stagnant due to average demand from the downstream construction and automotive industries. Additionally, Brent crude futures continued to decline in May and early June, reflecting slowing oil demand growth and increasing inventories, indicating a well-supplied market.

According to market sources, the demand of Phenol was subdued during the off-peak period for textiles, with downstream buyers typically accepting higher prices cautiously and purchasing only as needed. Yarn mills operated at reduced capacity due to decreased new orders and a sluggish trading environment, primarily dealing with existing stock. With the upcoming holiday season in Europe, manufacturing firms are expected to lower their operating rates, potentially extending supply shortages into the beginning of the third quarter of 2024.

Conversely, Phenol prices have consistently risen in China's domestic market. Meanwhile, the limited domestic supply and minimal supply pressure from traders have driven up the market price of Phenol. Sinopec increased its Phenol price in East China by 150 RMB/ton, reaching 8,350 RMB/ton. In North China, prices also rose by 150 RMB/ton, ranging between 8,300 and 8,350 RMB/ton. This price hike by Sinopec provided strong market support, with minimal supply pressure. Sellers set high prices and continued pushing them up and there were active responses from buyers. However, most orders were small, and buyers remained cautious about chasing high prices, leading to a trading volume that still needed to be fully realized. The consistent rise in prices of Phenol does raise some concerns for the downstream value chains as well with cost of production going higher and higher.

ChemAnalyst's pricing intelligence suggests that Phenol prices may continue to rise. The lower-than-expected year-on-year growth rate of the US Consumer Price Index (CPI) has alleviated inflationary pressures, increasing expectations for the Federal Reserve to cut interest rates in September. This, combined with rising international oil prices, is likely to support higher Phenol price realizations. Additionally, in China, following the May Day holidays last month, the supply of Phenol remains relatively limited, which could drive further price increases in the coming weeks.

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