Texas, USA: The Phenolic Resin market in the USA has demonstrated a bearish outlook in November 2023, and the prices of Phenolic Resin have been dropping week-on-week over the past few months, primarily influenced by weak demand from downstream industries. As per the current market scenario, a decline in the frequency of Phenolic Resin procurement is attributed to an oversupply situation in most of the consumer market and a low consumption rate.

External demand for manufactured products and chemical inputs has slowed after two years of double-digit growth. Weakness in the economic climate, particularly in the industrial sector, is anticipated to result in a 7.5% fall in US chemical exports in 2023. Capital spending increased by 4.3% to $27.2 billion in 2023, and growth is forecasted to drop to 1.1% in 2024 as rising borrowing rates limit investment.

An unusual destocking cycle began in Q3 '22 and extended for most of this year, stifling output. As the year ends, inventory destocking has essentially been handled, but signs of customer restocking have yet to appear. Basic chemical output in the United States declined 2.5% in 2023, with reductions in petrochemicals, organic intermediates, synthetic rubber, and manufactured textiles. Stronger exports led to slightly greater plastic resin output, which increased by 0.5%.

In the USA, the prices of Phenolic Resin fell week-on-week, and as of November 24, 2023, the prices of Novolac Phenolic Resin FOB Louisiana were assessed at USD 3500/MT, a drop of 5.4% whereas, cumulatively in this month. The prices fell by more than 11% primarily due to poor demand from the downstream adhesive, coatings, molding, and insulation sectors in the domestic as well as overseas markets as the consumers were hesitant to make newer purchases of Phenolic Resin amid built-up inventories.

Industry players indicated that dull demand and oversupply of Phenolic Resin are anticipated to linger for most of next year. Moreover, the European chemicals sector is struggling because customers are hesitant to place new orders, and long-term economic uncertainty keeps raw materials and energy prices high. Due to chronically poor demand for their products, such as Phenolic Resins, the corporations have been compelled to implement cost-cutting measures, prompting some to close manufacturing operations.

According to the ChemAnalyst database, the prices of Phenolic Resin are anticipated to drop further in the upcoming weeks as consumer demand is presumed to remain weak. High-interest rates and inflation are also projected to dampen demand for polymers in major economies as well. Furthermore, the Fed's policy blunders, i.e., keeping rates higher for longer or raising them more than required, remain a source of concern for the polymer and resin market. Moreover, fresh geopolitical conflicts, unforeseen financial instability, and a few other factors could impact the Phenolic Resin market.