Hamburg, Germany: The Phenolic Resin market in Germany has exhibited a decrement throughout August 2023 as poor demand has loomed large over the sector, notably in Europe, where high energy costs have forced enterprises to compete, despite the fact that chemical exports have continued to beat imports significantly.

The European Central Bank raised interest rates for the tenth time in a row, forging on in its fight against stubbornly high inflation that has plagued consumers in the Phenolic Resin market, even as concerns mount that higher borrowing costs might help push the economy into recession.

The rising realization that increased borrowing prices are impacting consumer and company decisions to invest and spend and are becoming a burden on the economy pushed the other way.

According to the purchasing manager surveys, the main European economies — Germany, France, Spain, and Italy — also reported declining service sector activity in August, despite the conclusion of a good tourism season in Spain and Italy. This comes from a worldwide industrial recession that is particularly painful for Germany, Europe's largest economy.

In Germany, the month-on-month prices of Phenolic Resin fell to USD 5240/MT in July from USD 5380/MT in June, a drop of 2.6%. Again, the prices of Phenolic Resin declined by 4.2% and settled at USD 5020/MT in August 2023, primarily due to poor demand from the downstream adhesive, coatings, molding, and insulation sectors, which was weak in the domestic as well as overseas markets. Consumers were hesitant for newer purchases of Phenolic Resin amid the uncertain economic situation in the Eurozone.

A lower euro versus a surging US dollar also impacts the forecast, as the market participants believe the economic downturn will affect Europe and China. As per the assumption, the US Federal Reserve might achieve a smoother decline by completing its rate rises without causing the economy to contract.

As per the market participants, the prices of Phenolic Resin continue to falter amid the ongoing Russian and Ukraine conflict, OPEC's responses to declining oil prices, and a slowdown of economic activity from China.

According to the ChemAnalyst database, the sentiments for Phenolic Resin in the chemical manufacturing segment could demonstrate a weaker outlook in the upcoming months as consumer demand for Phenolic Resin is presumed to run slower. High-interest rates, tighter credit conditions, and persistent inflationary pressures will continue to influence the industrial industries that chemical makers sell to. Chemical output for Phenolic Resin is expected to shrink considerably in 2023 as a result of the industry's overall poor economic condition.