Stumbling Trade Activities Affect Phenol Prices Negatively In The Global Market
- 12-Aug-2022 3:11 PM
- Journalist: Jung Hoon
Global Phenol prices are continuously dropping due to the sluggish demand for the product. Phenol Prices are pulling down because of a downward costs trend in raw materials and the falling need for Downstream derivatives.
The German Phenol market has been consistently facing an energy crisis due to the limited supply of Natural gas from Russia, which led to an alternative usage of solar power. Amidst the energy crisis, boosting Solar energy has rescued the manufacturing plant's production. However, the sufficient availability of Phenol in the domestic market didn't force the manufacturers to produce further; the declining purchase from the regional and international markets worried the manufacturers. Thus, the factory side price slumped, and the traders followed the same trend.
The huge availability of upstream Crude in the Asian market influences the feedstock Benzene and Cumene prices. Following the raw material values, the cost of Phenol also fell. Additionally, the downstream derivatives Bisphenol A and Phenolic Resins market is also dropping, resulting in the low requirement for the product. Thus, the poor purchasing activities from the domestic and the regional markets ushered in the declining price trend of Phenol. Besides, the South Korean market has been manufacturing bio-based Phenol from plants, supporting the Phenol price drop. Therefore, post witnessing the declining price trend, the price of Phenol decreased by 3% in the South Korean domestic market and reduced to $40 per tonne on 12th August.
In the USA, growing fear of recession has been dragging down Crude and its derivatives prices in the local market. The poor demand from the end-use automotive, construction and pharmaceutical sectors negatively impacts Phenol pricing. Furthermore, the collapsing US dollars and the reduction in the price of exported cargoes are the reasons for the Phenol price fall.
According to the ChemAnalyst team's analysis, the Phenol market will likely showcase an uptrend in the forthcoming weeks. The demand for the product might regain strength in the global market. The declining water level in the Rhine river in Germany will likely add inflationary pressure on the traders, resulting the increasing freight charges.