US Phenol Prices Surge on the Back of Robust Downstream Demand

Texas, USA: Over the past two weeks, the prices of Phenol have been inching higher at a fast pace in the US market. The rise in inquiries from the downstream Bisphenol A industries has been responsible for bullish market sentiments. The construction sector has also strengthened, actively purchasing upstream raw materials such as Phenol. Following eighteen months marked by increasing interest rates, there's currently a slowdown evident in both inflation and the labor market. This shift is contributing to a strengthening of manufacturing activities across the nation.

The ChemAnalyst database has shown that the prices of Phenol have increased by USD 100 per ton in the US domestic market. The limited production amidst the prevailing economic uncertainties has weighed upon the inventory of finished Phenol stocks. As per the market players, there was a relatively low availability of finished goods to meet the demand from the terminal Bisphenol A industries. The destocking phase that started in Q3 '22 persisted throughout much of this year, reducing production. As the year approaches its end, the destocking of Phenol inventory has mostly been resolved, but indications of customers replenishing their stocks have not appeared yet.

On the other hand, domestic prices have been on the rise in China, particularly in the context of the Bisphenol A industries, where increased inquiries have bolstered market sentiment. To protect their profit margins, manufacturers have raised their price quotations. This shift in the market led several major local factories to adjust their listed prices, which positively influenced the local Phenol market, resulting in heightened transactions. Concurrently, the operational rate of Yanshan Petrochemical's 300,000 ton/year Phenol ketone plant remained steady, aimed at maintaining market equilibrium. However, amidst the weak economic growth in the Chinese market, China's industrial profits experienced a decline of 7.8% from last year in the January-to-October period, although at a slower pace compared to previous months. This data underscores an uneven post-pandemic recovery, emphasizing the necessity for additional stimulus to enhance market confidence.

According to ChemAnalyst's pricing intelligence, the prices of Phenol might gain momentum in the US market in the upcoming months. The demand surge anticipated from the construction sector downstream could elevate the market value of Phenol. Furthermore, the availability of Crude Oil is also expected to be adequate, meeting the downstream Petrochemical production effectively. However, The International Energy Agency has projected a minor surplus in the global oil markets for 2024, even in the scenario where OPEC+ nations decide to prolong their cuts into the following year.