US Phenolic Resin Prices Shows Stability in March 2024 Amidst Improved Consumer Demand

Texas, USA: The US Phenolic Resin market has noted stability in the second half of March, as the market dynamics have not observed any considerable shifts. After registering a continuous decline in prices due to weak consumer demand and ample material availability, the prices of Phenolic Resin have stabilized.

The demand for Phenolic Resin from downstream markets such as automotive and construction has noted improvements, as government data revealed. According to the Commerce Department, residential construction investment saw a 0.7% increase after a 0.1% uptick in the previous month. However, a 0.3% decrease in construction spending following an unchanged figure in January was noted; although overall, market conditions have been improving.

Private construction spending remained steady for the second consecutive month in February 2024. On the second front, automotive sales volume in March is anticipated to demonstrate growth compared to March 2023 and 2022, reflecting the ongoing expansion of the market. The projected figure of 1.45 million sales in March would signify a 4.5% year-over-year increase and align closely with the 10-year average for the month, historically recognized as one of the strongest sales periods in a given year.

The robust sales are underpinned by significantly enhanced levels of new-vehicle inventory. According to industry experts, at the beginning of March, the total supply of available new vehicles had surged by more than 50% compared to the same period last March. For the week ending on March 29, 2024, the prices of Novolac Phenolic Resin were assessed at USD 1570/MT. On the production side, the cost support from the upstream raw materials of Phenolic Resin has increased during this period.

The prices of feedstock Phenol noted an uptick due to increased cost pressure from the crude oil market, eventually influencing the downstream market, including the Phenolic Resin market. Last month, OPEC+ members reached an agreement to prolong voluntary output reductions of 2.2 million barrels per day to bolster the market. This decision aims to evenly distribute production cuts among other OPEC+ member countries. Earlier, Russia had stated its intention to slash oil output and exports by an additional 471,000 barrels per day in Q2 2024, aligning with coordinated efforts among certain OPEC+ participating nations.

Talking about the economic health of the nation, after recessionary fears and high inflation, conditions have been improving. The revised Q4 2023 real GDP showed an upward adjustment to a 3.4% annualized gain, marking an increase from the previously estimated 3.2%. Additionally, personal consumption saw a revision upwards to 3.3% from the initial estimate of 3.0%. All these factors have positively influenced the Phenolic Resins market.

According to ChemAnalyst pricing intelligence, the prices of Phenolic Resin are anticipated to demonstrate an inclining trend in the upcoming weeks, backed by improved demand for Phenolic Resin in the automotive and construction industry. Also, any significant fluctuation in upstream prices could lead to higher manufacturing costs of Phenolic Resin.