Abstract: In the first half of 2023, the domestic phenol market rose and fell, and the price was mainly driven by supply and demand factors. The spot price fluctuated around 6000-8000 yuan/ton, which was at the low level in the past five years. According to Longzhong statistics, the average price of phenol in East China in the first half of 2023 was 7,410 yuan/ton, down 3,319 yuan/ton, or 30.93%, compared with 10,729 yuan/ton in the first half of 2022. The highest point in the first half of the year was 8275 yuan/ton in late February; The low point was 6200 yuan per ton in early June.

1. Market review

New Year’s Day holiday back to the city, although Jiangyin phenol port inventory is low to 11,000 tons, but considering the impact of new phenol ketone equipment into production, terminal buying slowed down, the market decline increased industry wait and see; After the new equipment was put into production less than expected, the spot was tight to stimulate the market upward, with the Spring Festival holiday approaching, the resistance of inter-regional transportation increased, and the market gradually turned to the state of closure. After returning to the market during the Spring Festival holiday, phenol welcomed a good start, with an increase of 400-500 yuan/ton in just two working days. Considering the terminal recovery after the holiday, it takes time for the market to stop rising and falling, when the price is as low as 7700 yuan/ton, considering the high cost and average price, the shipper’s shipping intention to yield profits becomes weak. In February, two sets of phenol ketone devices in Lianyungang operated smoothly, the right to speak of domestic products in the phenol market was enhanced, and the operation of imported ships and cargoes was affected by the terminal waxing and waxing involved in the shipment of suppliers. Although the export shipment and negotiation operation in the same period were initially stimulated, the support was limited, and the overall market rose more and fell less. In March, the start of downstream bisphenol A decreased, phenolic resin domestic competition pressure, the downturn in the demand end led to a decline in phenol in many places, although the high cost and average price during the period to support the market upward, but the high stick is not easy, the fatigue market intermittently intersperted among them.

From April to May, domestic phenol ketone devices ushered in a centralized maintenance period, the impact of supply and demand interactive game, the market in April was mixed, the external environment in May was weak, the demand side was sluggish, the device overhaul was difficult to release, the downward trend led by the market, and the low price continued to innovate. Near the middle of June, the downstream bidding operation increased the participation of the industry, the domestic spot circulation increased, the shipping pressure of the cargo holder eased, the enthusiasm increased, and the appropriate replenishment of the terminal before the Dragon Boat Festival holiday, the support center of gravity steadily rose. After the Dragon Boat Festival, the market bidding operation temporarily came to an end, the industry participation slowed down, the supply side shipments turned weak, the focus highlighted a slightly weak trend, and the trading turned quiet.

2. Pressure on profit and loss

In the first half of 2023, the average profit of phenol ketone enterprises was -356 yuan/ton, a decrease of 138.83% year-on-year, the highest profit value after mid-May was 217 yuan/ton, and the lowest value was -1134.75 yuan/ton in early June. In the first half of 2023, the gross profit of domestic phenol ketone devices is mostly negative, and the overall profit time is about 1 month, and the profit is not more than 300 yuan/ton. Although the price trend of double raw materials in the first half of 2023 is less than the same period in 2022, the price of phenol ketone is also the same, even worse than the raw material end, and the profit loss situation is difficult to ease.

3. Market outlook

In the second half of 2023, under the expectation that domestic phenol and downstream bisphenol A new devices will be put into operation, the supply and demand pattern will still be dominant, and the market will be changeable or normal. Affected by the production plan of new devices, the competition between domestic and imported goods, domestic and domestic goods will be further intensified, the start and stop status of domestic phenol ketone devices is variable, and the export and domestic competition situation in some downstream areas can be alleviated, the pace of new production of bisphenol A and the start of new devices are also particularly critical, of course, in the case of continuous losses in phenol ketone enterprises. Cost and price movements also need to be watched. Comprehensively judging the situation that supply and demand fundamentals will face and the current profit and loss situation, it is expected that the domestic phenol market in the second half of the year is difficult to have a relatively large rise and fall performance, and the price fluctuation range is expected to be 6200-7500 yuan/ton.