Phenol Capacity Expansion Leads to Changes in Seasonality
In 2023, the overall price of phenol in China showed an "M"-shaped trend. The price of phenol in 2023 was lower than the average level in 2022 throughout the year. As of the end of October 2023, the price of phenol in East China was RMB 8,100/mt, an increase of RMB 500/mt compared to the end of last year. The highest price appeared in mid-September at RMB 9,700/mt, and the lowest price appeared in early June at RMB 6,200/mt. The spread between the highest and the lowest prices was RMB 3,500/mt.
Phenol supply pressure increased with accelerated capacity growth.
From 2019 to 2023, China’s phenol capacity showed an increasing trend. In 2023, China’s domestic phenol capacity is expected to reach 6.35 million mt/a, an increase of 51.01% compared to 2022, with a significant increase in growth rate. From the perspective of absolute capacity, the net capacity increase is expected to be 2.145 million mt/a in 2023. Among them, Shenghong Refining and Chemical, Jiangsu Ruiheng New Materials, and Guangxi Huayi New Material put new phenol and acetone capacity into operation in the first quarter of 2023. In addition, Shanghai CEPSA Chemical's original 480kt/a phenol and acetone unit was expanded in September, involving a total phenol capacity of 1,025k/a. In addition, there are four new phenol and acetone units planned to be put into operation in China in the fourth quarter, including Hengli Petrochemical, Qingdao Haiwan Chemical, Longjiang Chemical, and Huizhou Zhongxin Chemical (Phase II), with a total phenol capacity of 1,120kt/a.
The seasonal characteristics of phenol in 2023 were different from previous years.
From the perspective of seasonal characteristics, there is a significant difference between the seasonal characteristics of phenol prices in 2023 and the data from the past decade (2013-2022). In February, the price index was higher than the seasonal trend in the past decade, partly due to the lower-than-expected production of new capacity, and partly due to the recovery of demand after the Spring Festival. There was a significant downward trend in April, May and June, and the decline in June was even greater. Although June also showed a slight downward trend in history and because it is the off-peak season of demand, the decline was far less than that of June 2023. In July, August, and September, there was an upward trend beyond historical seasonal indexes. Firstly, downstream demand showed signs of recovery. Secondly, the supply and demand of phenol returned to a relatively balanced stage. Furthermore, the rapid rebound in upstream benzene prices provided strong bottom support for the phenol market. In October, the phenol market once again experienced a decline that went against seasonal characteristics. On the one hand, the poor cost transmission in the early stage triggered strong negative feedback in the downstream market. On the other hand, the expected new capacity also exerted some impact on phenol prices.
Before the end of 2023, it is necessary to pay attention to the fluctuations in the buying and selling mentality caused by the production progress of new units and the export situation. Fuyu Chemical plans to put into operation a 250kt/a phenol and acetone plant in 2024, so the supply pressure in the phenol market will continue to increase next year.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
