US Phenolic Resin Prices Remain Bearish in February 2024 Amid Weak Demand

Texas, USA: The US Phenolic Resin market continued to demonstrate weakness in February 2024 due to weak supply and demand fundamentals. Throughout February, the prices of Phenolic Resin decreased in the US domestic market owing to sluggish demand from the downstream adhesives and coatings industries.

During the freezing weather in various parts of the USA, business operations were disrupted, leading to the temporary closure of numerous manufacturing facilities for the same reason, thereby leading to decreased procurement of Phenolic Resin. As of February 16, 2024, the prices of Novolac Phenolic Resin FOB Louisiana were assessed at USD 1800/MT.

Additionally, the shipping time increased due to ongoing supply disruptions in the Middle East, resulting in containers being diverted from the Cape of Good Hope, thereby increasing the delivery time of various cargoes, including raw materials for Phenolic Resin. Along with this, freight charges across various sea routes have also surged due to ongoing geopolitical conflicts, eventually leading to depressed market sentiments.

Furthermore, fluctuations in crude oil prices also impacted the Phenolic Resin market. Week-on-week, oil prices increased and settled at their highest level in almost two months. This rise was fueled by positive U.S. economic growth and indications of Chinese stimulus, which bolstered expectations of increased demand. Additionally, concerns about supply from the Middle East Asia provided further support to the Phenolic Resin market.

On the other hand, there were some signs of improvement in various economic factors. Throughout the final weeks of 2023, the American economy sustained its vigorous expansion, reflecting a year defined by minimal unemployment, controlled inflation, and the non-occurrence of the widely predicted economic downturn.

The Commerce Department reported that the GDP, adjusted for inflation, grew at an annual rate of 3.3% in Q4 2023. Between the end of 2022 and the end of 2023, GDP experienced a 3.1% expansion, marking a significant rise from the previous year's rate of under 1%. However, due to harsh weather conditions, few manufacturers were shut down this month; however, no significant impact on Phenolic Resin prices was registered.

Also, the shipping time increased due to ongoing supply disruptions in the Middle East, resulting in containers being diverted from the Cape of Good Hope, thereby increasing the delivery time of goods. According to the ChemAnalyst database, the prices of Phenolic Resin are anticipated to recover in the upcoming months on the back of improved domestic consumption and a rebound in overseas consumer inquiries for Phenolic Resin.