Phenol prices have been fluctuating globally since February, due to the Russian invasion on Ukraine. In addition to the conflict, the COVID outbreak in China has worsened the current situation. The government has ordered closures in numerous places across China due to a rapid surge in COVID cases. During the lockdown, a major Phenol producing factory in China was also affected, resulting in a halt in Phenol production. As the number of cases continues to rise, ports have been closed, impacting the import-export. As China is India's largest exporter, the upheaval might severely impact the Indian market.

Phenol is an aromatic compound derived from Benzene and Propylene, which is extracted from Crude oil and is used in our day-to-day life. The price of Crude is skyrocketing, causing a hike in the prices of Phenol. High freight charges, payment issues, order delays, and rerouting of ships affected the trade. Demand from end-use industries such as paints, dyes, etc is dropping due to the price hike, as it affects their earnings and margins.

In the USA, Phenol prices have been stable for the past three weeks due to low demand from the domestic and global markets. The rise in freight charges has led to a decrease in the demand from the global market. The price of Phenol was not much affected in this region due to ample supply.

As per ChemAnalyst, if the war tends to continue, demand for the product may rise globally, hence, affecting freight. In addition to the current situation, a continuation in the lockdown can also impact trade causing insufficient supply. Since there is a high chance of inventory running low, high demand from end users can be predicted.