In May 2026, the domestic phenol market experienced an overall downward trend with no significant rebound, and a bearish sentiment persisted throughout the month. After the May Day holiday, the market quickly fell, and mainstream domestic production enterprises continued to lower their factory quotes in the middle and late stages, further dragging down spot prices. In terms of price, the spot price in East China was quoted at 8300-8500 yuan/ton at the beginning of the month, but fell to 7400-7600 yuan/ton at the end of the month, a monthly decline of 11.7%. The imbalance of regional supply flow has led to the continuous influx of Shandong’s supply into East China, exacerbating local inventory pressure.

Insufficient support for raw material costs: The upstream pure benzene market has slightly weakened, and the fluctuation and decline of crude oil have dragged down the overall cost of chemical products. Coupled with sufficient supply of pure benzene itself and flat downstream demand, it is difficult for the raw material side to provide price support for phenol, and the cost defense line has loosened, opening up space for the decline of phenol.
The overall market supply is abundant: the average operating rate of domestic phenol ketone units remains at a high level of 82%. Although some units have undergone maintenance and load reduction, the operation of large-scale integrated refining and chemical units is stable, and the overall supply of goods is sufficient. At the same time, the industry’s inventory is slowly accumulating, traders have a strong willingness to cash out from shipments, the market’s supply is loose, and suppliers are lowering prices to reduce inventory, driving the market to continue to weaken.
Downstream demand continues to be weak: The weak demand for phenol in the two major downstream markets is the main reason for the downward trend in the market. The production of bisphenol A and phenolic resin industries remains at a low level, with weak market conditions and limited profits. Downstream factories only require immediate procurement without centralized inventory replenishment. The slow recovery of the real estate and automotive terminal industries, coupled with high inventory of downstream finished products, extreme caution in raw material procurement, and no positive release from the demand side.
After the holiday, the demand fell short of market expectations, and the bullish sentiment in the market quickly dissipated. Traders and downstream remained cautious, and spot trading was sluggish. The synchronized weakening of the market further suppresses market confidence, with a majority of selling in the market and a lack of momentum to stop the decline and rebound.
East China: Market trendsetter, with the largest decline and overall light trading volume; North China/Shandong: Following the downward trend in East China, the main source of goods is for export, with a slightly smaller decline compared to East China; South China: Supported by logistics and local demand, it has slightly stronger resistance to decline, but overall it still follows the market’s decline.
In the short term, the weak supply and demand pattern of phenol in early June is difficult to improve, and the price is likely to fluctuate narrowly at a low level. The mainstream range of spot prices in East China is 7400-7600 yuan/ton, with limited room for both major and major declines. In late June, as the traditional peak season for chemical industry approaches, downstream facilities are expected to restart in a concentrated manner. Coupled with the stabilization of crude oil and pure benzene costs, the phenol market is expected to stop falling and rebound slightly, with prices expected to recover to 7500-8000 yuan/ton.