Global Phenolic Resin Prices Decline as Demand Struggles Against Increased Supply

As per the recent assessment, Phenolic Resin prices remain under significant pressure globally, throughout the October 2024 due to a combination of weak demand and fluctuating feedstock costs, particularly phenol and formaldehyde.

In China, while there were slight increases in Phenolic Resin prices attributed to improved support from feedstock phenol, the overall market sentiment remains bearish. Demand from key sectors, including construction, has seen a continuous decline, reflecting ongoing challenges within the real estate market. Data from the top 100 real estate companies in China revealed a staggering 38.8% year-on-year drop in sales for the first nine months of 2024, significantly curtailing demand for construction materials, including Phenolic Resin.

In South Korea, Phenolic Resin prices have also faced downward pressure.  This decline was primarily due to a persistent slowdown in construction activity and limited downstream procurement. The automotive sector has provided some relief with around 5% year-on-year growth in exports, but this has not been enough to offset the sluggish domestic demand. The Phenolic Resin market continues to grapple with high inventory levels and weak consumption, leading to subdued trading conditions. Downstream inquiries remain limited as traders offer discounts to alleviate inventory pressures.

Meanwhile, in Europe, particularly in Germany, Phenolic Resin prices have maintained a steady yet declining trajectory. The European market is grappling with significant oversupply, driven by reduced manufacturing activity and high inventory levels. The downturn in the construction sector and decreased automobile sales have exacerbated the supply-demand imbalance, with major automotive players like Volkswagen issuing profit warnings due to weakened industrial demand. The combination of low inquiries and minimal purchasing activity has kept market sentiment bearish, with further price reductions anticipated in response to continued declines in phenol prices.

In the USA, the Phenolic Resin market is also facing challenges as prices remain under pressure due to low demand from key sectors such as automotive and construction. Recent data indicates a decline in production rates, reflecting subdued market conditions. Similar to Europe, the North American market is dealing with high inventory levels and competition among producers, which has kept pricing stable but under pressure.

Overall, the Phenolic Resin market across APAC, Europe, and the USA is characterized by stable supply but significantly subdued demand. Producers face a challenging environment as they contend with fluctuating feedstock costs and high inventory levels. However, looking ahead, demand from key Asian economies like India is expected to remain robust, particularly as the festive season concludes. This anticipated uptick in demand may lead to improved prices Phenolic Resin in the coming months, especially as traders respond to limited material availability by selling stocks at higher prices.