In early April, the phenolic resin market witnessed a lowering demand from the Chinese domestic market. In addition, the ongoing geopolitical tension increased the upstream crude prices globally, which resulted in the stabilization of Phenolic resin prices.

China has been facing the resurgence of the COVID outbreak since early March and continues to show no signs of lapse. Furthermore, the doubling down of President Xi Jinping’s ‘Zero COVID’ policy resulted in the shutdown of affected areas, including China’s largest port and economic hub, Shanghai. The rising COVID cases and lockdowns have impacted the supply chains in China, causing the Phenolic resin price to remain stable.

As China is a significant importer of phenolic resin, the aforementioned COVID incidents caused a drop in imports, disrupted freight traffic, and local demand began to wane. Furthermore, port congestion in Shanghai, transportation restrictions in COVID-affected areas, and a trucking scarcity have exacerbated the current scenario. Also, the production cut, which hampered offloading and onloading activities, further impacted the trade, provoking the market participants to seek out other suppliers. As a result, on April 18th, the Phenolic resin price in China settled at USD 3907 per MT.

Moreover, the escalated tension between Russia and Europe due to the conflict has affected the upstream crude prices, which further affected its derivatives. Phenol and Formaldehyde are the raw material used in the production of Phenolic Resin; hence, the rising raw material prices have forced the manufacturers to retain the Phenolic Resin market in stabilized trend culminating in strong prices of the imported material.

According to ChemAnalyst, “Continuous lockdown is expected in China due to emerging COVID cases, which may cause the Phenolic resin market to drop. Market closure might lead to a drop in domestic demand and a production halt. Shanghai port congestion is likely to extend due to the continuous shortage of trucks along with transport restrictions.”