Hamburg, Germany: Throughout March 2024, the prices of Phenol have demonstrated a bullish trend across the European market. The escalation in prices of upstream Benzene, coupled with bullish Crude Oil prices, has led to an increase in the manufacturing costs of Phenol. In addition, the reduced operating rates of the manufacturing firms in the previous quarters have also started to exert supply-side pressure on the Phenol market.

The ChemAnalyst database has shown that the prices of Phenol witnessed an increment of USD 90 per ton in the domestic market of Germany in the week ending 29th March compared to the prices observed at the start of the month. In recent weeks, the price of benzene, a crucial ingredient in production processes, has sharply increased, reflecting a broader trend in the regional market of constrained supply. Market players have therefore been keeping phenol prices at higher levels to protect their margins. However, the higher interest rates across the European markets have been impacting the purchasing power of end-use industries, resulting in reduced purchases of upstream raw materials.

On the other hand, in March, Phenol prices in the South Korean market remained relatively stable, with no significant changes reported. Market players have indicated that the replenishment of inventory by China has already occurred following the Spring Festival holidays. Consequently, there has been a decline in the average number of inquiries for Phenol towards the end of the first quarter of 2024. Furthermore, as per industry insiders, LG Chem, a prominent figure in South Korea's petrochemical sector, has declared a temporary suspension of phenol and acetone manufacturing activities at its Daesan plant in South Korea. The unscheduled maintenance, slated for March 23 to April 5, is essential due to a mechanical breakdown at the plant. Despite having an annual capacity of 300 thousand tons of phenol and 180 thousand tons of acetone, the facility will operate at only 70% capacity during the repair period.

According to the pricing intelligence of ChemAnalyst, prices might witness an uptrend in the European market. The continued buoyancy in Crude Oil prices following the decision of OPEC+ to continue production cuts in Q2 2024 is likely to impart pressure on the manufacturing costs of downstream derivatives, including phenol. Moreover, in the Asian market, market players are optimistic about the boost in demand from downstream Bisphenol A industries. Additionally, demand from downstream Phenolic Resins is also expected to improve, which could support the price realizations of Phenol.