Global Market Outlook on Phenol

 

  • The global phenol market is expected to grow at a CAGR of 3.4 percent during 2017–2022
  • The growth is driven by demand from Asia, which is expected to grow at 4.9 percent, due to increase in the usage of BPA (used to make polycarbonates and epoxy resins) 
  • The BPA demand is expected to be driven by automobile (4–5 percent) and construction (3–4 percent) industries for the next 2–3 year

price-forecast-phenol

Demand Market Outlook

  • The global phenol market has excess capacity, and it is expected to improve over the next 2–3 years, due to capacity additions, mainly in Asia 
  • Sufficient capacity additions are being planned on par with demand growth, resulting in no significant decrease in the supply–demand gap; hence, giving more negotiation power to the buyers (particularly, large-volume buyers from the BPA segment)

Industry Best Practices

  • The top buyers and sellers negotiate monthly phenol contract prices, based on benzene contract prices, which are usually fixed at the start of a new month. These are later released via public domain or IPROs, which are used as reference by other market participants for further negotiations

North America

  • In the US, the contract period lasts for 1–2 years, with a scope for monthly and quarterly price revisions 
  • Benzene contract prices are used as a starting point to arrive at phenol prices

EU

  • Being a balanced market and a key trade destination, importers (usually, small volume) engage in spot buying, while large-volume buyers are in contract ties with domestic producers
  • In the EU, similar to the US, benzene contract prices are used to arrive at phenol prices

APAC

  • Both spot and contract buying are followed; large number of distributors and traders import material from the US, which has increased the inclination of buying patterns toward the spot
  • Contract buying is prevalent in China, South Korea, and Japan, where both large-volume buyers and large capacities are installed throughout Asia

Global Market Size: Phenol

  • The global phenol market is expected to reach $14.4 billion by 2022, at a CAGR of 3.4 percent from 2017 to 2022
  • The key market driving end uses are the automobile and construction segments
  • The phenol market is expected to grow, on the account of its commercial viability and rising demand for its derivatives, such as epoxy resins, polycarbonates, nylon, Bakelite, detergents, phenolic resins, pharmaceutical drugs, and herbicides

  • Moreover, the primary derivative from the phenol is  BPA,which is anticipated to boost the market over the forecast period