Phenol Prices Decline on Weak Downstream Demand as Traders Rush for Quick Liquidation
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Importers have reduced phenol prices by ₹2/kg, setting them at ₹94+ (Ex-Kandla) for direct consumers on advance payment terms, and ₹95+ for traders and small buyers. The supply of phenol remains stable, supported by consistent vessel arrivals and prompt shipments.
Chemical Price
- Importers have reduced phenol prices by ₹2/kg, setting them at ₹94+ (Ex-Kandla) for direct consumers on advance payment terms, and ₹95+ for traders and small buyers.
- Domestic manufacturer Deepak Phenolics, through its authorized dealers, has offered prices at ₹95+ (Ex-Dahej) on advance payment terms.
- Bulk purchase interest is being observed at ₹93+ (Ex-Kandla) on 90-day credit terms, though confirmed deals have not yet been reported, according to a market participant.
- Week-on-week, phenol prices have fallen by nearly ₹4/kg, driven by weak market sentiment and sluggish downstream demand. Additionally, the declining Asian benchmark CFR China prices indicate a bearish outlook for phenol in September 2024.
Chemical Demand and Supply
- The supply of phenol remains stable, supported by consistent vessel arrivals and prompt shipments. However, falling feedstock prices for benzene and propylene signal a bearish trend in the market.
- Importers and traders are looking to quickly liquidate stocks as further corrections in upstream crude oil and naphtha prices could lead to significant declines in Phenol prices.
- Earlier in the first week of September, sellers were optimistic about a potential rise in downstream demand from plywood manufacturers, but this demand has not materialized as expected. Bulk buyers remain hesitant to book inventory in the current market climate. Additionally, market activity in China is lower this week due to the Mid-Autumn festival, further affecting trade.
- India's monthly demand for phenol is estimated at 38,000 metric tons, with domestic production from HOCL and Deepak Phenolics contributing around 23,000 metric tons. This leaves a gap of approximately 15,000 metric tons to be covered by imports.
Chemical News
- In the international market, upstream crude oil (WTI) prices rose by 0.18% to $70.21/barrel.
- FOB Singapore naphtha prices remained at $624/MT.
- Feedstock FOB Korea benzene prices dropped by $10 to $930/MT.
- Propylene prices also fell by $5 to $840/MT.
- Meanwhile, downstream CFR China phenol prices decreased by $5 to $1,015/MT.
Expert Opinion
It is expected that phenol prices are likely to remain volatile due to weak downstream demand and declining feedstock costs. However, the recent recovery in crude oil and naphtha prices may provide some support, preventing a further sharp drop in phenol prices.
Daily Market Report
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