In January 2026, the domestic phenol market broke away from its weak performance at the beginning of the month and showed a broad upward trend of “bottoming out, rebounding, and continuing to rise”, becoming a highlight of the chemical market at the beginning of the year. According to the monitoring of Business Society, the mainstream quotation in East China has risen from 5750 yuan/ton on January 1st to 6250 yuan/ton on January 29th, with a cumulative increase of about 8.7% for the whole month. The significant changes in supply and demand, cost, and industrial chain linkage have driven the price to achieve a phased breakthrough.
This month, the phenol market has been mainly driven by “inventory digestion cost drive tight supply and demand balance”, gradually strengthening overall. At the beginning of the month, the inventory at Jiangyin Port exceeded 21000 tons, and imported goods were concentrated at the port. Holders of goods offered discounts, and the market slightly declined; In the middle of the month, the price increase of raw materials such as pure benzene and propylene has raised costs, led by price adjustments by leading companies such as Sinopec. Coupled with the reduction of equipment load, lower than expected imports, and downstream pre holiday inventory replenishment, the quotation has risen to 6000-6250 yuan/ton, and supply and demand have shifted towards a tight balance; Factories continue to increase prices, downstream bisphenol A linkage strengthens, trading is active, and prices accelerate upward.
Cost side support: The dual raw materials of pure benzene and propylene have risen strongly simultaneously, forming a rigid support. Pure benzene prices rose from 8800 yuan/ton at the beginning of the month to over 9500 yuan/ton at the end of the month, driven by international crude oil fluctuations, domestic styrene plant destocking exceeding expectations, and demand recovery; Due to the maintenance of multiple PDH units in Shandong region, there is a temporary shortage in the supply of propylene, and the quotation has increased synchronously. Phenol ketone enterprises have continuously raised their ex factory prices of phenol to alleviate production cost pressures, becoming the core driving force behind the upward trend in market prices.
Supply and demand pattern reversal: Supply contraction and demand recovery form a two-way support, driving supply and demand from loose to tight balance. On the supply side, mainstream phenolic ketone enterprises in China have arranged maintenance before the Spring Festival in advance, and some units have reduced their load operation, resulting in a decrease in effective production capacity release. In addition, the arrival of imported goods at the port is lower than expected, and the total market supply continues to shrink; On the demand side, downstream bisphenol A and phenolic resins are driven by the demand for pre holiday replenishment of epoxy resin, resulting in a steady increase in demand for essential goods. Coupled with the periodic hoarding behavior of traders, this further amplifies demand and lays the foundation for price increases.
The decline in port inventory and the increasing willingness to raise prices have consolidated the upward channel for prices. With continuous shipments, port inventory has fallen from 21000 tons at the beginning of the month to below 15000 tons, establishing a tight supply-demand balance pattern. The willingness of suppliers to lower prices has significantly weakened, and there is a strong sentiment of reluctance to sell at high prices. The price adjustment behavior of leading enterprises continues to boost market confidence, and the demand for pre holiday stocking in the terminal market is released in stages. The continuous support of essential transactions in the market, coupled with the amplification of traders’ hoarding sentiment, forms a virtuous cycle and helps prices steadily rise.
In the short term, the phenol market is expected to remain volatile at a high level from the end of January to before the Spring Festival. The tight supply and demand of pure benzene, high crude oil prices, and low inventory levels will provide favorable support, making it difficult for prices to fall significantly. However, there is potential pressure from the decline in terminal production, shrinking demand, and expectations of import to port and plant resumption after the holiday. There is a risk of a pullback after the holiday; It is recommended that traders prioritize realizing profits, controlling inventory, and downstream enterprises replenish small quantities as needed, without blindly hoarding goods. Pay attention to the opportunity for price correction after the holiday.
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