Phenol prices have been witnessing consistent surge since late-December owing to favorable upstream Benzene and Propylene prices. Although demand form downstream segment has remained nearly stagnant, prices have surged as manufacturers have been consistently transferring the increasing cost pressure upon their downstream buyers.

Benzene prices in East China have witnessed a consistent yet gradual rise since December as the overall plant operating rates have been relatively low. Besides, recovery in crude oil prices in early January with ease in fears of fatality rate of Omicron virus has also pushed up the prices of its downstream products in several markets.

As China caters to a large share of total Petrochemical consumption in the Asia-Pacific region, several traders have been heard indulging in restocking activities to abate any hurt to consumer sentiments at times of halted production due to the lunar holidays in China.

Consistent rise in freight rates have been another concern hovering over the margins market participants. Oceanic freight declined steadily since mid-September on several inter as well as intra continental trade routes. However, in the past few weeks there has been a continuous rise in freight charges along trans-Pacific routes as per Drewry Index. Considering the available data, freight rates have surged by nearly 3-4% along Shanghai-New York and Shanghai-Los Angeles trade routes and are expected to climb further during lunar holidays in China.

Phenol prices in China have surged by nearly 5% in the first two weeks of January owing to the rise in feedstocks Benzene and Propylene prices. As per ChemAnalyst, “Phenol prices are expected to continue tracing an upward trajectory as the restocking activities are unlikely to abate until the lunar holidays. Besides, concerns of container shortage and rising freight charges are also likely to keep petrochemical prices high in the regional market in Q1.”