From 2020 to 2022, there will be more than 2,100 ktpa of new phenol capacity that will come on line together with 1,300 ktpa of acetone. During the same period, around 3,000 ktpa of new BPA capacity will also start. This will then be followed by a number of new epoxy resins and polycarbonate plants over the next several years. How will these new capacities impact the supply and demand of these products in China and Asia?
In the last quarter of 2020, when Zhejiang Petrochemical started a new 400 ktpa phenol plant and Lihuayi started a new second 210 ktpa phenol line, market participants had expected that these two new capacities would drive prices down in the first half of 2021, but prices would then recover when new bisphenol A and polycarbonate plants were brought on line in the second half of the year.
However, tight supply, high feedstock costs and maintenance plans saw phenol prices hit a two-year high in mid May. At the same time, the spread between phenol and cyclohexanone prices started to improve, therefore prompting an increase in offtake volumes from this sector.
In January to April, China exported 35,722 tons of phenol, this is a 282% increase year on year. Import volumes have remained the same during the same period.
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