Hamburg, Germany: Over the past two weeks, the European Phenol market has witnessed a continuous decline in prices, largely driven by reduced inquiries from the downstream construction sector. This decline has noticeably impacted the overall price realization of Phenol in the region. Additionally, recent interest rate hikes, implemented to curb inflation, are further pressuring Phenol market sentiments.

According to data from the ChemAnalyst database, Phenol prices dropped by USD 125 per ton by the week ending 26th April compared to the previous week in the German market. The subdued demand from downstream Bisphenol A industries has resulted in a decrease in the procurement of upstream Phenol. Consequently, manufacturers have adjusted by reducing their offers to adapt to the market conditions. The situation is exacerbated by recent interest rate hikes, which aim to control inflation but have the side effect of further dampening demand. To navigate these challenges, manufacturers are focused on exploring cost-cutting measures or seeking out new markets to offset the slowdown in the European market.

On the upstream front, support from Benzene has been limited, further contributing to the downward pressure on Phenol prices. Additionally, downstream production facilities have been operating at slightly reduced rates, as there is already enough availability of finished stocks to meet demand from terminal markets. The manufacturing Purchasing Manager Index has also contracted, indicating a slowdown in industrial activity.

In terms of energy inputs, crude oil prices experienced a moderate decrease this week, driven by reduced concerns regarding conflict in the Middle East and slowed economic activity in major oil-consuming regions. However, a decline in US crude oil inventories limited the extent of these losses. Crude oil prices have retreated from recent peaks exceeding USD 90 per barrel, following the reduction in geopolitical tensions in the Middle East. On the other hand, in China, before the May Day holiday, trading was moderately average, with a sluggish uptake in the market. Manufacturer prices remained steady, providing a reliable pricing foundation, while trader prices were more flexible, adjusting to the current market situation.

Looking ahead, ChemAnalyst's pricing intelligence suggests that Phenol prices are expected to remain under pressure in the European market. The slowdown in demand from downstream Bisphenol A industries is likely to further impact Phenol market growth. Additionally, Germany's well-known structural issues are expected to persist, slowing down any potential recovery this year, along with potential cyclical headwinds. Thus, Phenol prices are expected to remain rangebound in the upcoming weeks in the European market.