Phenol Market Dynamics and Its Rising Demand

This blog goes into detail about the phenol manufacturing process, as well as regional prospects, pricing trends, market drivers, and key competitors.

Phenol: Definition

Phenol, commonly known as carbolic acid, is a fragrant white crystalline solid (at room temperature due to intermolecular interactions).

Phenol has the chemical formula C6H5OH and is an aromatic organic molecule. It has a slightly acidic flavour.

In the chemical structure of phenol, the hydroxyl group is located and linked to the benzene ring. Since it is a mild acid, it dissolves quickly in water.

It serves as a precursor for a number of important compounds, including phenolic resins, bisphenol A, polycarbonates, epoxides, and aspirin.

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The market is anticipated to be driven by rising demand from the chemical and pharmaceutical industries for phenol and phenol derivatives. Increased use of phenol as a raw material for various chemicals and derivatives will have a favourable effect on the market expansion. Phenol is also affordable and appealing to the consumer market, which will accelerate market growth.

Production Process

Benzene, CG propylene, cumene, and toluene are used to make phenol. The fundamental method of creating phenol from toluene is oxidation. During the liquid-phase reaction, toluene is further processed to produce benzoic acid, which is used as an intermediate in the production of phenol.

Regional Outlook in the Market of Phenol

Due to increased demand from growing economies such as China and India, the Asia-Pacific region is likely to dominate the worldwide phenol market. The automobile, construction, and consumer goods industries, which are the primary end-users of phenol-based products, are expanding rapidly in these countries.

North America and Europe are also important phenol markets, owing to increased demand for phenol-based resins and coatings in the construction and automotive industries. Furthermore, rising demand for phenol-based goods in the healthcare sector is propelling the phenol market in these regions.

Other regions, including Latin America, the Middle East, and Africa, are likely to see moderate development in the phenol market, owing to increased industrialization and urbanisation in these areas.

Overall, the worldwide phenol market is predicted to rise steadily over the next few years, owing to rising demand from end-use industries around the world.

Market Drivers

The rising demand for alkyl phenols is driving the global phenol industry. Alkyl phenols currently account for 4.5% of all end-use applications globally. Alkyl phenols are widely utilised as building blocks for fragrances, fire retardant compounds, thermoplastic elastomers, detergent precursors, fuel additives, and lubricant additives.

It is also found in high-performance rubber goods, coatings, adhesives, and tyres as a result of its downstream applications. Additional key drivers driving worldwide phenol demand growth include the expansion of phenol's end-use sectors, increased urbanisation, changed lifestyles, and an increase in disposable incomes.

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Bisphenol A is the largest player in the phenol end-use market, accounting for 47% of the industry share. The phenol market is booming as a result of rising demand from developing countries. The technical advancement in its production processes has provided additional impetus to the phenol market's expansion.

Phenol is in demand in industries such as agriculture and animal husbandry since it is used in fungicides and disinfectants. Because of increased demand for phenol derivatives such as polycarbonate and epoxy resins in the automotive and construction industries, the phenol industry is developing.

Phenol: Price Trend and Forecast

North America

US phenol prices have been falling as a result of weak cost support and low demand from downstream sectors in recent times.

Crude oil prices fell in November, putting minimal upward pressure on pricing. Demand for downstream paints and coatings has been poor to stable, resulting in low volume consumption.

The US PMI went below in November 2022, indicating a decrease in phenol production costs, manufacturing, and industrial activities. The already weak demand dynamics for numerous items were exacerbated.

Asia Pacific

Recently, the downward trend in phenol prices in China has continued.

The domestic market's low pricing was caused by moderate import prices, cheaper freight costs, and stable to weak demand from downstream paints and coatings and other related businesses.

The position in terms of worldwide demand has also been steady. Notwithstanding low buyer confidence, market participants reported high inventories.

Europe

Recently, the phenol market in Europe showed a slow development due to a reduction in consumption in the West and concerns about a European recession, as demonstrated by market members' reports of few inquiries from downstream consumers. As a result, consumer sentiment suffered.

While imports from Asia-Pacific have been numerous, increasing the amount of material available on the German market, feedstock benzene costs in Europe have declined as crude oil prices have fallen, reducing cost pressure.

Import availability has increased, aided by a significant decrease in freight prices on European routes.

Key Players in the Market of Phenol

• Ineos Phenol
• Cepsa Quimica
• Mitsui Chemicals
• Formosa Chemicals and Fibers
• Kumho P & B Chemicals
• Honeywell International Inc.
• Shell Chemical Co.
• Solvay SA

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