In February 2026, the domestic phenol market broke away from the previous low volatility pattern and showed a steady upward trend. The strengthening of cost support, structural adjustment of the supply side, and the resonance of downstream demand recovery have driven up prices, and market trading has improved compared to January. “Stable price increase” has laid the foundation for the industry’s full year recovery.
The price of phenol rose in a stepwise manner in February, with a significant increase. According to data from Shengyi Society, the benchmark price on February 1st was 6450 yuan/ton, which rose to 6650 yuan/ton on the 27th and increased by 3.1% for the whole month. The average price in the core market of East China is about 6500-6550 yuan/ton, while in the north, the increase is slightly higher due to factory led growth, and the regional price difference is reasonable.
From an annual perspective, the current phenol price is at the median level of the past year. As of February 27th, the minimum value of phenol price in the past year was 5670 yuan/ton, the maximum value was 7947.50 yuan/ton, and the median value was 6808.75 yuan/ton. The current price still has some room for improvement from the median value, and there is still potential for upward movement in the future.
（1） Strong cost support lays the foundation for price increases
The core raw materials of phenol, pure benzene and propylene, have been operating strongly this month, forming strong support. Pure benzene saw a slight correction, with supply and demand balanced, while the propylene market improved, highlighting cost transmission. Although the phenol ketone factory is still operating at a loss, the magnitude has not expanded, and the willingness to raise prices has increased; This month, the factory’s profit decreased by 90 yuan/ton compared to last month to -926 yuan/ton, and the enterprise’s price increase drove the market up.
（2） Supply side structural adjustment, marginal improvement of supply and demand pattern
In February, the supply of phenol was generally abundant but locally tightened, and the operating rate increased by 3 percentage points to 89% compared to January. The 320000 ton/year plant in Yangzhou Shiyou is operating at full capacity, while the 650000 ton/year plant in Zhenhai Refining has increased from 65% to 85%, increasing market supply; The shutdown of the 300000 ton/year plant in Huizhou Zhongxin Phase I and the 60% load of the 630000 ton/year plant in Ningbo Taihua have eased the supply pressure.
In terms of inventory, the inventory at Jiangyin Port increased to 38500 tons during the Spring Festival period, but the pressure of contract shipments from cargo holders was low. Northern factories led the rise, driving supplier sentiment and not suppressing prices. In 2026, the growth rate of new phenol production capacity will slow down, the import volume will decrease, and the domestic substitution effect will be significant. The import dependence is expected to drop below 3%, consolidating the dominant position in the domestic market.
（3） Downstream demand gradually recovers, supporting market recovery
The Spring Festival holiday resulted in downstream production rates of bisphenol A and phenolic resin dropping to 70.84% and 20% respectively, with weak demand support. After the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) Festival, enterprises gradually resumed work, and terminal demand recovered and procurement released, providing substantial support for the market. Bisphenol A accounts for over 40% of phenol consumption, and the addition of new facilities in 2026 will drive demand growth. The current expectation is positive, which will boost procurement. Phenolic resin benefits from the recovery of real estate and the lightweighting of automobiles, and the operating rate is expected to increase; The demand for high-end phenol is driven by new energy vehicles and photovoltaics, injecting momentum into the market.
Overall, in February, firstly, prices steadily rose, relying on rational cost and demand to climb, without speculative fluctuations; Secondly, there is a clear supply-demand game, with high port inventory and rising prices from suppliers, as well as a confrontation between downstream resumption of work and improved demand, resulting in moderate and increased transactions; Thirdly, there is regional synergy, with the northern region leading the gains and the eastern and southern regions following suit, resulting in a reasonable price difference.
In the short term, the market is expected to continue its upward trend in March. On the supply side, Huizhou Zhongxin Phase I plans to restart and Phase II will undergo maintenance, while Shandong Ruilin’s new facility will start production in mid March, releasing favorable news for the procurement of start-up materials; The downstream of the demand side has resumed work comprehensively, and the addition of bisphenol A facilities has driven demand growth; On the cost side, pure benzene and propylene are relatively strong, supporting a moderate upward trend in prices.
In the long run, 2026 is a crucial year for industry recovery, showing a trend of “slowing down supply growth and steadily recovering demand”. The annual production capacity is expected to be 6.5 million tons per year, with a capacity utilization rate of 83% and a consumption of approximately 5.8 million tons. Supply and demand are tending towards balance, and the price center is shifting upwards, resulting in improved profitability. Attention should be paid to risks such as fluctuations in raw materials and unexpected demand recovery.
In summary, the clear upward trend of the phenol market in February 2026 is an important signal for the industry’s recovery. The subsequent optimization of supply and demand will gradually push the market out of its low position and steadily recover.
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