Texas, USA: The US Phenolic Resin market has observed stability in March 2024, backed by steady procurement and firm support from upstream crude oil. Demand for Phenolic Resin from downstream construction, automotive, and other end-use industries has increased during this period, as indicated by the data.

The prevailing downward trend observed in previous months primarily stems from weakened demand for Phenolic Resin across downstream industries. However, current market conditions have seen some developments. Amid firm growth in the downstream automotive industry, the consumption of Phenolic Resin has increased in March. In the week ending on March 8, 2024, the price of Phenolic Resin was USD 1600/MT.

According to industry players, improvement in market conditions was observed in the first quarter of 2024. However, in the downstream construction industry, spending decreased surprisingly in January 2024 due to weakness in outlays on public projects. Additionally, the demand for new construction remains low due to tight housing supply and higher mortgage rates. According to recent data released by the Commerce Department, construction spending decreased by 0.2% in January, showcasing poor demand for Phenolic Resin from the construction sector. Also, mainly because of weak demand from the adhesive, coatings, molding, and insulation industries both domestically and internationally, as consumers were reluctant to make new purchases of Phenolic Resin due to existing high inventories.

Concerns regarding the economy and market conditions remain the major concern for the US automotive industry due to poor performance in the first two months of 2024, with low sales due to harsh weather conditions. According to industry experts, sellers continue to face tight margins and higher costs, resulting in piled-up cars among dealers, thereby reducing the demand for Phenolic Resin. Although things have changed from the previous quarter, the uptick noted in March auto sales helped rescue Q1 sales.

On the other hand, cost pressure from upstream Phenol increased in the first week of March due to fluctuations observed in crude oil prices. Crude oil prices rose due to low US crude oil inventories, a plunge in US gasoline stocks, and presumed supply disruptions after Ukraine’s attack on Russian refineries. As a result, manufacturing costs of Phenolic Resin are expected to surge.

According to the ChemAnalyst database, the prices of Phenolic Resin are anticipated to demonstrate stability in the upcoming weeks. Improved weather and increased incentives are presumed to bolster the demand for Phenolic Resin amid boosted sales in the auto industry in the upcoming spring season.