During the mid of July 2024, Phenolic Resin prices in the APAC region continued to rise, driven by increased raw material costs, particularly phenol and formaldehyde. These higher production costs forced manufacturers to raise prices, exacerbated by declining inventory levels and limited import availability. The surge in prices was further supported by strong demand from downstream sectors such as construction, automotive, and coatings, which maintained high procurement rates despite ongoing manufacturing activities.

China, a major exporter of Phenolic Resin, managed its production efficiently to meet domestic demand and stabilize prices. However, China's high domestic demand for Phenolic Resin impacted international prices, reflecting its significant role in the global market. Elevated upstream crude oil prices, influenced by OPEC+ production cuts and increased US summer fuel demand, also contributed to the rising production costs of Phenolic Resin. Geopolitical tensions and severe weather risks, including potential conflicts in the Middle East and intensifying hurricanes, further bolstered the bullish sentiment in the oil market, supporting the upward trend in Phenolic Resin prices.

China's manufacturing sector saw significant expansion in mid-2024, with production increasing at its fastest pace in two years due to rising new orders. This growth was supported by robust output and consumer goods demand, despite challenges such as delayed supplier logistics caused by extreme weather and material shortages. Additionally, strong export demand for Phenolic Resin to other Asian and European countries led producers to prioritize exports, limiting domestic supply. The China Passenger Car Association reported a 28% year-on-year increase in passenger car exports in June, with a 33% rise in total exports to 2.247 million units in the first half of the year. This surge in car exports boosted demand for Phenolic Resin in downstream industries like paint and coatings.

In India, Phenolic Resin prices also saw an uptick due to moderate demand and low inventory levels. Housing sales in India soared to an 11-year high in the first half of 2024, totaling 173,000 units, with Mumbai and Kolkata leading in sales volumes and growth rates. This increase in housing activity drove up demand for Phenolic Resin, particularly in the paint, coating, and automotive industries. Indian car exports surged by 32.42% YoY in June 2024, reaching 76,297 units compared to 57,616 units in June 2023, further supporting the demand for Phenolic Resin.

Market participants noted that demand for Phenolic Resin is gradually improving with the slow recovery in the construction sector, which benefits downstream industries like paint, coating, and other downstream industries. In China, the real estate market is stabilizing with cautious investment from real estate companies. Despite a weak consolidation phase in the first half of 2024, favorable policies are expected to boost market confidence and stimulate gradual recovery, which will likely support continued demand for Phenolic Resin in downstream industries in coming months.