In the latter half of February, Phenol prices in the United States showed a notable increase, with FOB Louisiana prices rising by 3.0%. The surge in prices reflected a complicated interaction of elements influencing the dynamics of the market, therefore generating a volatile environment for both consumers and producers of Phenol.

For Phenol, the state of the market was marked by persistent worries over supply tightness. Low supply levels have made the market quite sensitive to fluctuations in the feedstock Benzene market. Further driving the price rise was the recent rise in Benzene prices, which added to the increasing pressure on Phenol’s manufacturing costs. Despite these rising costs, demand for Phenol has stayed relatively steady. Buyers were seen rushing to build inventories and displayed resilience to the price swings. To capitalize on the current market situation, sellers raised their quotations for February deliveries of Phenol. The persistent tightness in Phenol supply was a main influence on this pricing pattern. Considering the above-mentioned reasons, the final price of Phenol FOB Louisiana was concluded at USD 1141/MT in the fourth week of February.

On the other hand, the downstream construction sector, a major consumer of Phenol, was experiencing mixed signals. Market players anticipate the need for building requirements in the future, due to the recent fires in Los Angeles, which destroyed almost all of the structures in the impacted areas. This may provide a brief uptick in demand, although the long-term outlook remains unforeseeable. According to market speculations, high mortgage rates would weigh on the overall construction activity for the year, thus adversely affecting the demand for Phenol later.

Usually, as the temperature rises, construction activity increases in the second quarter; but the incessant cold weather in the northern regions may delay the seasonal uptick in demand. Moreover, the probable 25% taxes on imports from Mexico and Canada would have a major effect on the automobile sector, a major user of Phenol compounds in the manufacturing of vehicle parts.

Higher tariffs would probably add up to the production costs, thus limiting demand later. Beyond the automobile sector, these tariffs could have knock-on effects on other Phenol compounds and maybe lower the overall demand for Phenol. The potential of reciprocal tariffs from other nations adds another layer of uncertainty over the market.

According to ChemAnalyst, Phenol prices in the USA still have a mixed short-term future. Although present demand is substantial, future Phenol pricing may be greatly influenced by high mortgage rates on buildings and the potential effect of foreign trade regulations. The ongoing tightness in Phenol supply will probably help prices go higher; but, the degree to which demand resists the economic headwinds will be crucial in determining the direction of the market in the next months.