For the Quarter Ending March 2023
North America
The rising upstream Benzene prices have pressured the manufacturing costs of Phenol throughout the first quarter of 2023. Although, the demand from the downstream paints and coating sector did not reciprocate the upward price trend of upstream raw materials and remained on the lower end. The adequate level of on-site inventories has eased the supply-side pressure. Shorter transit times and falling freight charges with improved availability of containers have supported the constant flow of finished goods. The production facilities have also been operating at their regular rates. Furthermore, towards late Q1, the inquiries from the downstream Bishpohenol A market remained moderate amidst the financial sector worries brought on by the failure of two banks. Thus, Phenol FOB Louisiana prices were concluded at USD 1239 per ton in March.
APAC
In the domestic region of China, the price trends of Phenol have demonstrated mixed market fundamentals. Even after the COVID limitation was lifted in the early first quarter, the downstream paints and coatings industry's purchasing sentiments remained subdued. Furthermore, The operating rates have improved in the Chinese market as several capacities came online after weeks of maintenance amid an improvement in demand in the domestic market. Towards late Q1, The cheap imports coming from Saudi Arabia and Thailand led to a reduction in the market value of Phenol. The cost support from upstream Benzene was also insufficient. As a result, the Phenol prices have inched lower. Consequently, Phenol CFR-Qingdao prices were settled at USD 1087 in March.
Europe
A drop in procurement from the downstream paints and coatings sector weakened the market growth of Phenol in the German domestic market in early Q1. The economic slowdown brought on by volatile energy prices has fostered inflationary pressure across the major economy of Europe, which in turn has imposed downside risk on the price realizations of Phenol. However, the prices improved in the mid-Q1, owing to rising upstream Benzene prices and improved inquiries from the downstream paints and coatings sector. Labor shortages amid wage issues in the European region have further inflicted the pricing dynamics of Phenol to remain buoyant. The production facilities have also operated at a reduced rate for the maintenance of the market balance as the inquiries from the downstream markets were not fully recovered. Therefore, considering the aforementioned reasons, Phenol FD Hamburg prices were assessed at USD 1476 at Q1-end.
For the Quarter Ending December 2022
North America
US Phenol prices have continued their downward decline into the last quarter owing to weak cost support and sluggish demand from the downstream industries. Crude oil prices continued their downward slide in November, thus resulting in weak cost pressure. Meanwhile, demand from downstream paints & coatings industries has been sluggish to stable, resulting in weak volume consumption. Consumer sentiment has dropped drastically in the US market in the last quarter, which has been vindicated by the drop in US PMI, which dipped below 50 (i.e., 49.7) in November 2022, signifying a contraction in manufacturing and industrial activities. The holiday season further contributed to the weak demand dynamics for several commodities. As of November 2022, Phenol prices were assessed at USD 1335 per MT on a FOB basis.
Asia Pacific
Phenol prices in China have continued their declining trend for a major part of the last quarter of 2022, although the market witnessed some very late recovery in the last two weeks of Q4 2022. Weak import prices and declining freight charges coupled with stable to weak demand from downstream paints and coatings and other allied industries culminated in weak pricing sentiment in the domestic market. International demand sentiment has also been on the stable side, as observed in early Q4 2022. Market participants reported ample inventories in the market amid weak buying sentiment. As of November 2022, Phenol prices were assessed at USD 1220 per MT CFR Qingdao,
Europe
In Q4 2022, the European Phenol market displayed a sluggish trend as the market participants reported limited queries from downstream users as the West witnessed a drop in consumption level amid fears of a European recession, which resulted in soft consumer sentiment. Meanwhile, feedstock benzene prices have dropped in the European continent as crude oil prices rallied downwards, easing the cost pressure, while the imports from the Asia pacific have been ample, increasing the material available in the German market. Import availability has increased and has been assisted by a drastic decline in the freight charges on the European routes. Thus, as of December, Phenol prices were assessed at USD 1410 per MT FD Hamburg.
For the Quarter Ending September 2022
North America
Phenol prices witnessed a mixed trend in the USA market during the third quarter of 2022. During the initial of Q3, Phenol prices increased by more than 5%, supported by insufficient material availability. High upstream prices, soaring inflation rate, and mounting energy prices have weighed upward pressure on the Phenol prices. On the other side, consumption from the domestic as well as from overseas markets has been stable. While during mid-Q3, Phenol prices plummeted by more than 10% due to weak demand dynamics and a fall in feedstock cumene prices. The demand from downstream derivative industries remained mostly stable amid sufficient inventory levels, resulting in deteriorated pricing dynamics. However, toward the end of Q3, Phenol prices marginally increased by 1% due to the improvement in the buying activities from the domestic market. As a result, prices of Phenol FOB Louisiana were assessed at USD 1642/MT during September.
Asia- Pacific
Prices of Phenol have showcased mixed trends in the China domestic market during the third quarter of 2022. During July and August, prices dropped as the cost pressure remained weak while the demand dynamics from downstream industries deteriorated. China's battle with Covid in Q3 2022 as the market activities remained under constant threat of covid related disruptions. Furthermore, Port activities were also halted due to the region's increase in covid cases. However, during September, prices increased by 5.3%, supported by the high cost of production. Also, the demand from the domestic market has slightly improved. Procurement was raised ahead of the National holiday in October. However, in South Korea, Phenol prices have witnessed a downward trend during Q3 of 2022 due to weak buying activities from the domestic and overseas markets. Meanwhile, South Korea witnessed supply disruptions in September as a typhoon disrupted trading activities and halted port activities. Although, the inventory level remained stable for the firm due to weak consumption rates from the downstream industries. Hence, prices of Phenol FOB Busan were assessed at USD 1202/MT during September.
Europe
During the third quarter of 2022, Phenol prices fell continuously in the European market, supported by the weak feedstock Cumene prices. The decline in the Phenol prices was attributed to the steady flows of cheap imports from the Asian and the USA market. Although, the domestic cost of production continues to remain high due to soaring energy and operating cost, resulting in low output costs. In addition, the speculation of recession loomed over the European region throughout the third quarter, which lessened consumer sentiments as the inflation rates reached record highs during Q3. According to Eurostat data, inflation in Europe was hiked from 7.1% to 10% during September. Furthermore, supply dynamics remained under pressure amid port congestions and labor strikes. Netherlands, Belgium, and Germany witnessed major port congestions coupled with vessel bundling, while the UK observed labor strikes that limited the material available in the domestic market. As a result, prices of Phenol FD Hamburg were assessed at USD 1581/MT during September.
During the second quarter of 2022, the price of Phenol witnessed mixed sentiments in North America. Initially, the price dropped in April and May due to the reduced demand from the downstream derivative BPA and Phenolic Resin. The poor buying sentiments from the Chinese market due to the COVID resurgence resulted in the stockpiling of the product. Hence, the high inventories in the domestic market gradually pulled down the Phenol prices. Later, in June Phenol market gained strength due to the skyrocketed upstream crude. The demand from the Chinese market regained strength after the easing lockdown. Also, the Federal reserves have increased the interest rates, which boosted the Phenol pricing. As a result, the price of Phenol settled at USD 1770/ tonne FOB US Gulf in the quarter ending June 2022.
Phenol prices showcased an oscillating trend in the Chinese market for the second quarter of 2022. In April and May, the Chinese domestic market was under lockdown restriction following the Zero COVID policy. The continuous suspension of the domestic market affected the buying and selling activities within the country, resulting in the stockpiling of the product. Moreover, the lockdown in Shanghai port has disrupted the trade activities, further pulling down the Phenol prices. Later, by June, the lockdown completely eased, resuming the local markets. Bullish demand from the domestic market was observed after the domestic market restarted. Therefore, the price of Phenol settled at USD 1660/ tonne CFR Qingdao in the quarter ending June 2022.
During the second quarter of 2022, Germany's Phenol market rose continuously. The Russian incursion on Ukraine increased the price of upstream crude and feedstock benzene and cumene, which in turn increased the cost of Phenol. Additionally, the rising demand from the local and regional markets inflated the price of Phenol. The traders were forced to change their offers because of the high freight costs brought on by the soaring fuel prices. Additionally, the increasing demand for the downstream derivative Bisphenol A and Phenolic Resins also inflated the Phenol market. As a result, the price for FD Hamburg in the second quarter of June settled at USD 2100/tonne.
