Phenols are quite similar chemical compounds to alcohols except for a few differences. Phenols from stronger hydrogen bonds and therefore, these are widely used in industries. Since these form stronger hydrogen bonds, these are also more soluble in water and have a higher boiling point than alcohol. Phenols are highly toxic and caustic and are usually colorless liquids at room temperature. Different types of phenols are used in household products as intermediaries for synthesis. The most commonly used products that contain phenol in low quantities are household disinfectants and mouthwash. Even since ancient times, British surgeons have been using phenol as a disinfectant in surgical procedures. Talking about the industrial use of phenols, these were used as starting agents for producing plastics, explosives, and drugs. Phenols are derived from natural resources and specifically plants such as poison ivy, various plant oils and more. However, not all the plants contain similar phenol compounds and the phenol derived from these plants also have different industrial and medical uses.
Due to being used in a variety of end-use consumer products and industrial applications, the global phenol market remains steady. The global phenol market is growing at a steady pace with a compound Annual Growth Rate (CAGR) of 3.4 percent and it is expected to maintain the same growth rate till 2022. Similarly, the phenol market size is also expected to reach $14.4 billion by 2022 as well. The global market is not very consolidated and it is fairly distributed throughout the globe. APAC holds the maximum market share of 51 percent whereas North America and the European Union followed with 21 percent and 23 percent market share respectively.
Global Outlook on the Phenol Market:
Phenol is a chemical compound that has both industrial and medical uses. Such versatility of phenol makes it a high-demand product for many end-use products and industries. Here is a global outlook on the phenol market.
- The phenol market is not very fragmented on a global level as it involves 40 major suppliers that operate from different regions and countries. The U.S. and European Union are the homes of the largest phenol suppliers and the APAC market is going to be the next avenue for expansion. High demand from regions such as North America, Europe, and APAC has given a boost to global phenol production. Another reason for such high demands is also increased commercial viability and demand for related products such as epoxy resin, nylon, polycarbonates, and more. A byproduct of phenol i.e. Bisphenol-A (BPA) is also expected to boost the demand and commercial of the compound which will, in turn, boost the market.
- The top global suppliers of phenol include INEOS Phenol, Sinopec Group, Cepsa Chemical, FCFC, and Mitsui Chemicals. INEOS Phenol is the largest supplier of phenol-based in the U.S. and Europe. The company is also likely to enter the APAC quite soon. The market is also expected to witness increased imports from countries such as India for the next 4-5 years. This will create lucrative situations for the exporters in the coming years. Talking about the industry best practices, the contract period usually sustain 1-2 years in which price revisions are offers on a monthly or quarterly basis.
- Traders use Benzene market price as a starting point for negotiating and arriving at the right price. Asian traders prefer spot transactions in the majority as they perform 60 percent spot transactions whereas more than 80 percent European Union and the U.S. traders prefer contract transactions. However, contract buying is preferred in regions such as China, Japan, and South Korea as these countries deal in large capacities.
- The key demand driver in the industry is BPA phenol that has a demand growing with a CAGR of 4 percent. Such a demand for BPA is due to requirements in the construction and automobile sectors which are expected to show demand of 4-5 percent and 3-4 percent respectively. The demand in both sectors is likely to sustain for the next 2-3 years. In addition, North America has higher supplier power whereas APAC and the European Union have medium-level supplier power. The situation inverses in the case of buyer power as North America has lower supplier power whereas APAC and the European Union have medium-level buyer power.
- The most impactful cost component is the raw material which affects different regions with its dynamics. North America has a 50 percent dominance of raw material whereas the dominance in the regions such as the European Union and APAC is 48 percent and 54 percent respectively.
The global phenol market is huge and it is growing simultaneously with the rising demand in the end-use industries. Although the industry is not growing at its full potential, the increasing use of phenol in the pharmaceutical industry and the automotive industry shows good prospects in the coming years.