Divergent Phenolic Resins Market Trends: Stability in Germany, Rise in China

Hamburg (Germany): In the first week of June 2024, the market for Phenolic Resins exhibited divergent trends between Germany and China. In Germany, Phenolic Resins prices remained stable at USD 1820/MT, FOB Hamburg, with market conditions characterized by moderate supply and low to moderate demand from the construction and automotive sectors. Despite declining prices of upstream Phenol, the market saw limited movement as manufacturers hesitated to adjust prices amidst tepid demand. The European construction industry faced significant challenges, including labor shortages and reduced production, contributing to subdued demand for raw materials like Phenolic Resins.

In Germany, the stable prices of Phenolic Resins reflect a cautious approach by manufacturers amidst challenging market conditions. With the construction industry facing labor shortages and reduced activity, demand remains muted despite ample supply. Upstream price trends, including fluctuations in Benzene and LNG costs, are expected to influence future pricing dynamics, while uncertainties in global shipping routes could add further volatility.

Conversely, in China, Phenolic Resins prices saw an upward trend, reaching USD 1350/MT, FOB Qingdao, marking an increase of USD 20/MT. This bullish market scenario was driven by tight domestic supply conditions and cautious inventory management by manufacturers. Despite adequate availability of upstream Phenol, the supply of finished Phenolic Resins struggled to meet demand from the construction and automotive industries. This imbalance, compounded by weak post-holiday demand and high container shipping rates, contributed to the upward pressure on prices.

Meanwhile, China's bullish Phenolic Resins market anticipates sustained price increases driven by persistent supply constraints and growing demand from construction and automotive sectors. Factors such as post-holiday restocking, inflationary pressures, and geopolitical developments will likely shape market dynamics, underscoring the region's resilience amidst global economic shifts.

Looking ahead, the outlook for Phenolic Resins in both markets diverges further. In Germany, stable prices are expected to persist into July with a slight decline forecasted for August, reflecting continued cautious market sentiment and adequate supply dynamics. Factors such as seasonal variations in demand, potential adjustments in upstream Phenol prices, and evolving shipping costs are anticipated to influence price movements.

In contrast, China's Phenolic Resins market is poised to remain bullish throughout the summer months. Forecasts indicate a steady increase in prices for both July and August, driven by anticipated rises in demand from downstream industries, continued tight supply conditions, and escalating shipping costs affecting global trade routes. The market's sensitivity to upstream Phenol prices and macroeconomic factors, including inflationary pressures and manufacturing activity, will likely shape future price dynamics.