Shanghai, China: The prices of Phenol have been consistently dropping since the start of March 2023 in the Chinese domestic market. The limited procurement from the downstream end-use industries has weakened the market sentiments, and as a result, the price realizations of Phenol have continued to fall across the regional markets. In addition, lackluster demand from the European markets amid rising interest rates and global recession fears has also constrained the upward momentum in the pricing dynamics of Phenol. Although, with the subsiding COVID-19 effect, the Chinese economy has reinforced and has been infusing considerable momentum into global economic growth.

The ChemAnalyst database has demonstrated that the price trends of Phenol have plunged by approximately 2% observed last Friday, compared to the price observed in the March start. In China, the manufacturers were unwilling to sell the goods at lower prices, as the downstream procurement was mainly based on rigid demand. The inventory levels were adequate, and the market sentiments from the downstream paints and coatings sector were not strong. Furthermore, the average pick-up rates from China to North Europe have been reported by market participants. The over-availability of containers across Chinese ports has further prompted downward pressure on transportation costs.

As per the observed market scenario, the upstream US Oil companies might keep production stable or opt for a slight increase amid inflationary pressures. Although stronger Chinese demand may support the oil market, crude prices have fallen this week as worries about a new financial crisis have been raised by Silicon Valley Bank's failure.

According to ChemAnalyst, the price trends of Phenol will remain bearish in the forthcoming weeks. The demand from the downstream paints and coating sector might remain tepid amid sufficient Phenol inventories in the markets. Furthermore, Western energy consumption is anticipated to be hampered by the unrest in the US and European economies, which is expected to slow down the market growth of major petrochemicals, including Phenol, in the forthcoming weeks.