The phenolic ketone market returns to rationality in 2025, ushering in structural opportunities in the first half of 2026.

Shift in Market Characteristics: Paradigm Shift from Speculation-Driven to Demand-Dominated

in the second half of 2025, China's phenol ketone market experienced a profound reshaping of trading logic. The market showed a clear "de-financialization" trend, price volatility narrowed, speculative trading activities significantly reduced. The underlying reason for this shift is a fundamental loosening of the supply and demand pattern: even if there is an unplanned shutdown of the device, the market price response is still slow, indicating that the inventory buffer mechanism has been relatively perfect.

Industry earnings data reveal the grim reality: in June 2025, the phenol ketone industry's profit was negative 346 yuan/tonne, and the average monthly gross profit of the bisphenol A industry was negative 498 yuan/tonne. This loss state of the whole industry chain essentially reflects the process of restructuring the profit distribution pattern of the industry chain. For overseas traders, this means that the arbitrage space in the Chinese market is greatly compressed, and the traditional regional spread trading model is facing challenges.

Structural Imbalance of Industrial Chain: "Single Point Dependence" Dilemma of Phenol Market

downstream application over-concentration risk

there are obvious structural defects in China's phenol market. Data show that bisphenol A accounts for 68% of downstream demand and phenolic resin accounts for 18%. This "top-heavy" application structure makes phenol prices almost completely subject to a single downstream product. What is more worrying is that the demand for phenol cyclohexanone has shrunk sharply from 5% in 2024 to 2% in 2025. This demand loss has been irreversible as early as the first half of the year, further weakening the market toughness of phenol.

Analysis of Transmission Mechanism of Bisphenol A Industrial Chain

deep downstream of bisphenol A, PC (polycarbonate) accounted for 62%, epoxy resin accounted for 30%. In 2024, PC production surged by about 20%, surpassing epoxy resin as the largest consumption area of bisphenol A. However, PC as a consumer product, its demand elasticity is limited, 2025 terminal goods although stable but lack of explosive growth momentum. Epoxy resin production in 2024 increased by about 15% year-on-year, but consumption growth in 2025 is expected to be only 6%, the demand for bisphenol A is weak.

This rigid conduction chain leads to the price of phenol is mainly driven by the cost of pure benzene upstream, and its own bargaining power is extremely limited. For international supply chain participants, this means that more attention needs to be paid to the global supply and demand dynamics of pure benzene, rather than relying solely on the supply and demand judgments of phenolic ketones themselves.

Acetone market double squeeze: import shock superimposed on downstream weakness

asian Capacity Adjustment Triggers Supply Chain Restructuring

from January to September 2025, China's total acetone imports reached 329300 tons, a year-on-year increase of 40.76, with an average monthly increase of about 10000 tons. This anomaly stems from the strategic contraction of MMA production capacity in Asia: in the fourth quarter of 2024, Asahi Kasei closed Thailand's PTT Company's 70000-ton/year MMA plant, and Japan's Kolali reduced MMA production capacity from 67000-ton/year to 33500-ton/year. These sources of acetone, originally used for local MMA production, have been diverted to the Chinese market in large quantities, directly suppressing the domestic price center.

For overseas traders, this change means a fundamental change in the flow of acetone trade in the Asia-Pacific region, and the traditional Japan-China and Southeast Asia-China trade paths need to be reassessed.

Chain effect of pressure on the whole line of downstream products

the downstream of acetone showed overall weakness. From January to July 2025, China's acetone exports surged by 41.28 per cent, mainly to Thailand, Japan, Peru and Taiwan, accounting for 58.05 per cent of the total. However, MMA domestic demand is limited, January-September exports of 203000 tons, down 13% year-on-year, superimposed on the expansion of domestic C4 products, profit margins were severely squeezed. MIBK's new production capacity is in the red, and the willingness of enterprises to purchase acetone is low.

It is worth noting the reversal of the cost advantage of the process route: acetone fell 28% throughout the year, while propylene fell only 15%, making acetone isopropanol regain cost competitiveness in the second half of the year. However, this change has not yet been fully transmitted to purchasing behavior, providing potential arbitrage opportunities for keen traders.

Market Outlook 2026: Structural Opportunities and Uncertainty

in 2026, China's phenolic ketone market will show a pattern of "tight in the first half of the year and cautious throughout the year. Deterministic production capacity is only 350000 tons, further narrowing from 360000 tons in 2025, and the pace of expansion has slowed significantly. More importantly, the maintenance of integrated full-chain factories is concentrated in the first half of the year, especially for northern enterprises, which will tighten supply in stages and provide support for prices.

On the raw material side, the fundamentals of pure benzene supply and demand have improved, and the reduction in external imports is expected to form. The extreme market of pure benzene swallowing phenol ketone profits in 2024 is difficult to reproduce in the short term, which means that industry profits in the first half of 2026 are expected to be repaired to a relatively healthy level.

Yet uncertainty remains. In 2024, China's bisphenol A exports surged by 400 to 25200 tons year-on-year, shifting from net imports to net exports. If the overseas supply policy is adjusted or peripheral devices are restarted, the market balance may be impacted again. It is recommended that industrial chain enterprises maintain flexible inventory strategies and pay close attention to capacity dynamics and trade policy changes in the Asia-Pacific region.