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[Industry Focus]：Phenol rose rapidly at the end of the year, and whether it can continue to make a breakthrough in the future

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the end of 2021, the phenol market ushered in a wave of rapid rise. As of December 28, the closing price of the East China phenol market was 9700-9750 yuan/ton, up 675 yuan/ton from the closing price of 9000-9100 yuan/ton on December 15. This wave of rising prices, both the magnitude and speed of the rise are beyond the industry expectations.

Phenol major manufacturers and market data changes in the month (unit: yuan/ton)

entered December, due to the negative impact of the deep drop in crude oil prices in the early stage, the downstream purchasing intention was insufficient. In addition, due to the consideration of public health events and the slowdown in demand in the early stage of the Spring Festival, the sales rhythm was advanced and the market supply and demand were mismatched in the short term, resulting in a strong bearish atmosphere in the market, with some bearish reaching the level around 8500 yuan/ton, but the bottom of the 9000 yuan/ton integer mark in the market was strongly supported, the market did not go as weak as expected, with the later part of the phenol ketone device negative, and downstream bisphenol A demand is stable, the end of the year market showed a concentrated pull-up trend. As of December 28, the closing price of East China phenol market was 9700-9750 yuan/ton, the factory price was firm, and the spot quantity was tight, and traders were reluctant to sell at low prices.

With pure benzene spread to annual high cost correlation decline

As of December 28, the closing price of phenol market in East China was 9700-9750 yuan/ton, while that of pure benzene market in East China was 6950-7070 yuan/ton. The price difference between the two was 2715 yuan/ton, which was basically close to the highest point of the year. The price difference between phenol and pure benzene was widened and the cost correlation decreased. It also reflects from the side that this wave of phenol's rising market cost side contributed little.

Domestic supply shrinkage superimposed on low port inventory

to the second half of the year, due to the decline in the operating load of some domestic phenolic ketone factories, and due to the early sales pace of some traders, the domestic contract volume at the end of the month is limited, the factory has no inventory pressure, some restrictions or suspension of delivery, resulting in the domestic goods can be raised in the spot tight. And port inventory has always been at a relatively low level of the year, the port inventory in the past month basically fluctuated at the level of 2.4-30,000 tons, importers low-price sales intention to maintain.

Downstream Bisphenol A Demand Robust

entering the second half of the year, after the cost-promoting effect slowed down, the industry focused on the downstream bisphenol A new project put into production. At present, although it was late, it was not absent after all. At the end of the year, the rise of this wave could not be separated from the assists of bisphenol A. It is reported that the bisphenol A plants in Tianjin and Pingmei Shenma have been running smoothly. Assuming that 40% of the two bisphenol A production lines in Tianjin and 50% of the bisphenol A production lines in Henan Pingmei Shenma have been started, the increase in phenol consumption in one month should be around 13,000 tons. In addition, Zhejiang Petrochemical's 240,000-ton/year phase II bisphenol A plant was put into operation at the end of December, and the plant operation needs further follow-up. Assuming that the new bisphenol A plant built by the three major enterprises runs smoothly in the later period, the phenol consumption increment will reach around 49,000 tons in one month. Downstream bisphenol A demand increment should not be underestimated.

to sum up, the leading role of supply and demand in this wave of rising market is obvious. in the later period, considering the factors of the Spring Festival holiday, some small and medium-sized enterprises stopped work for holidays in the middle and late of January, the demand weakened, and the sales pressure of traders was mostly concentrated in the first half of the year. at the beginning of the month, the new domestic contract volume was released, and under the current price, the downstream cost pressure increased, and the intention of hoarding and replenishment decreased, the market continues to rush high resistance, but the demand for bisphenol A is strong, in addition to the price of phenol enterprises is strong, the average price of the contract in January is expected to be high, superimposed on the first quarter import supplement limited background, the market is difficult to have a larger fall space. Later focus on the downstream pre-holiday stock demand and buy-and-sell mentality of the game.

Source: Zhuo Chuang Information

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