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Under the situation of low market demand, major manufacturers balance supply and demand by reducing operating rates. In May, South Korea's LG Petrochemical's 180,000-ton/year phenol plant operating in Incheon has already dropped to 60%, and it plans to maintain it at 60% in June. Formosa Chemical Fiber Corporation of Taiwan Province of China also reduced the operating rate of the device from the original 100% to 80% to 90% at the end of May.
In addition, both traders and manufacturers have indicated that a large number of production shutdowns in May and June will be conducive to a rebound in prices. Mitsubishi Chemical began a month-long shutdown of its 25-million-ton/year facility in Kashima, Japan, at the end of May; Mitsui Chemicals also began a planned 40-day shutdown of the 250,000-ton/year phenol plant in Singapore. South Korea's Kumho Chemical shut down the Incheon petrochemical plant at the end of May for a 17-day overhaul. Sinopec Gaoqiao Petrochemical Company also carried out a one-month overhaul of its 60,000-ton/year plant in early June. The tight supply caused by a large number of stoppages caused Chinese importers to raise the supply price of phenol. Manufacturers said that the recovery of phenol prices will depend on the trend of benzene prices. In the short term, benzene prices in Asia will continue to maintain its downward trend.
Industry analysts believe that other factors affecting the recovery of phenol prices include the establishment of a new 200,000-ton/year phenol-acetone plant by Sinopec Gaoqiao Petrochemical Company. The product has entered the domestic market since early June.
Producer cuts down output to balance market supply and demand Asian phenol prices get out of the trough
According to "Asian Chemical News", Asian phenol prices have already bottomed out in mid-May and will gradually pick up in June and July. According to analysis from major Chinese manufacturers, the reason for the lower prices in May was the increase in inventories and sluggish demand for phenolic resins. According to market sources, the supply situation in June will begin to improve as the majority of Chinese manufacturers’ inventory is sold short. At the same time, as the buyer returns to the market, the price of phenol will gradually rise.