China Phenol Extends Fall as Inflows, Spring Festival Add to Selling Pressure
Spot phenol prices in eastern China fell to a fresh five-year low last week, as steady inflows and the absence of planned plant turnarounds ahead of next month’s Spring Festival intensified selling pressure, according to market sources.
The weekly average spot phenol price in eastern China dropped to 5,750 yuan per metric ton ex-tank for the assessment week ended on Thursday, down for the seventh consecutive week to mark the lowest level since November 2020, according to data from Chemical Market Analytics by OPIS. The weekly average price of 5,750 yuan/mt ex-tank was equivalent to an import parity value of about $677/mt CFR China, before antidumping duties were added.
The phenol-to-benzene spread — the difference between spot phenol and spot benzene prices and a measure of phenol producers’ profitability — shrank to 415 yuan/mt to mark the narrowest spread since February 2025, CMA data shows.
Ahead of the Jan. 10 restart of Zhejiang Petroleum and Chemical Co.’s 400,000 mt/year Phase 2 plant — the only phenol production facility undergoing maintenance — selling pressure mounted as more imports are arriving at a time when no domestic plants are scheduled for a turnaround. With the market downturn since October already reinforcing a generally subdued outlook, the nine-day Spring Festival starting mid-February is set to significantly cut the number of trading days for the month.
Intensified price competition in the Shandong region has pressured prices in Lianyungang, triggering a knock-on effect across the eastern China market, a China-based trader said. In addition, around 12,000 mt of Middle Eastern phenol is expected to arrive in the second half of January. As a result, some traders have accelerated sales to complete January contractual sale volumes ahead of schedule, pushing prices to as low as 5,650 yuan/mt ex-tank last week, before they begin placing February volumes from the second half of this month.
On the demand side, the restart of Shandong Fuyu Chemicals’ 180,000 mt/year bisphenol-A plant early last week, following nearly four months of downtime, should help rein in excess phenol supply in the Shandong market. However, unless phenol producers take concrete steps to curb output, the market is likely to remain burdened by surplus supply in the lead- up to and following the holiday period, the trader added.
Looking ahead, overall supply is set to be expanded further by the start-up of Shandong Ruilin Polymer Materials’ 217,000 mt/year phenol plant in March.
In Asia, two regional producers have shifted to the buying side following the late-2025 shutdown of their respective plants.
Chang Chun Plastics Co. in late December issued a spot tender to buy 8,000-9,000 mt of phenol for January-March delivery, as OPIS earlier reported, following the late-October shutdown of affiliate Taiwan Prosperity Chemical Corp.’s 340,000 mt/year plant.
Formosa Chemicals & Fiber Corp. has decreased the run rate at its 400,000 mt/year Mailiao plant to 50%, below the industry’s typical minimum of around 60%, after completing modification work last month. This is expected to primarily affect phenol exports to India, which totaled close to 43,000 mt in the second half of 2025.
Meanwhile, the closure of Ineos Phenol Singapore’s 310,000 mt/year plant is expected to tighten Southeast Asian exports to Northeast Asia as well as India, at the same time causing a supply shortfall within Southeast Asia.
However, these developments have not yet translated into any meaningful change in market sentiment. Availability in the region remains largely adequate, limiting the immediate impact of these outages and output cuts on the broader market.
To India, decreased inflows from Southeast Asia have yet to spur any near-term supply concerns, as soft domestic prices and persistently elevated inventories continued to cap spot buying ideas at import parity. Deals for January loading have been concluded at $800/mt-$820/mt CFR India, the lowest since OPIS records began in April 2024. Some market participants noted that any impact on the underlying supply-demand fundamentals could take several more weeks to materialize.
Spot phenol prices at the key western port of Kandla declined to 82.00-83.00 rupees per kilogram ex-tank last week, capping import parity at around $826/mt. Inventories at the start of January were at around 25,900 mt, said a market source, down by 5.4% from mid-December. Stock levels have held above 25,000 mt since the end of August, except for a brief dip below that threshold in the first half of September.
Uncertainty surrounding the protracted India-U.S. trade talks, alongside threats of even higher U.S. tariffs, has added to broader macroeconomic caution. On Jan. 4, U.S. President Donald Trump warned that Washington could raise tariffs on Indian goods “very quickly” if New Delhi does not stop buying Russian oil.
Indian exports to the U.S. already face a 50% import tariff, among the highest globally, after President Trump in August added a 25% punitive levy to the existing 25% tariff, in retaliation for the country’s continued purchase of Russian crude. According to India’s Global Trade Research Initiative, exports to the U.S. fell 37.5% in dollar terms between May and September 2025, with sectors including gems, solar panels, textiles and chemicals hit the hardest.
Market participants are also awaiting clarity on the launch of India’s antidumping investigations into phenol as well as acetone imports, which has been delayed to early 2026 from end-2025, said a market source.
On top of the spot demand spurred by industry rationalization, regional supply could tighten further from late February as producers including Chang Chun Plastics, Huizhou Chung Shun Chemical, Lotte GS Chemical and Mitsubishi Chemical carry out planned turnarounds on a rolling basis.
“India’s phenol market is still quite bad, inventory pressure is there, importers are showing interest in replacement cargoes but are not willing to pay higher prices,” said a regional trader. “This situation could reverse in another couple of weeks.”
—Reporting by Trisha Huang, thuang@opisnet.com; Editing by Mei-Hwen Wong,mwong@opisnet.com