Global Phenol and Acetone Market Review 2025

Overview: A Year Defined by Oversupply and Weak Demand

The global phenol and acetone markets spent 2025 navigating a landscape shaped by oversupply, weakening downstream demand, and significant shifts in trade flows. What began as a sluggish start evolved into a year marked by structural pressures, deepening competitive imbalances, and a growing acceptance that some of the demand lost in recent years will not return.

Early-Year Market Sentiment: Cautious and Constrained

Market sentiment was already cautious at the beginning of the year. Most downstream sectors were experiencing year-on-year declines, and construction activity remained particularly muted. This had a direct impact on the United States, where the traditional paints and coatings season was nearly nonexistent, removing one of the busiest demand periods in the phenol chain.

North American producers remained operational, but run rates hovered around 55–60 percent and remained largely unchanged throughout the year. Poor global demand limited export opportunities, and U.S. phenol exports dropped sharply—from 120,000 tons to 60,000 tons year over year. Although the region avoided major rationalization, market activity remained subdued, with restocking offering only momentary relief.

Europe's Position: A More Severe and Structural Decline

Europe entered 2025 in an even more challenging position. Years of depressed demand had already removed close to half of phenol and acetone consumption through rationalization and downstream contraction. Trade routes continued to shift as inexpensive Asian material, driven by regional oversupply, arrived in Europe in large volumes. This included phenol, acetone, and multiple downstream commodities, reshaping the competitive landscape and pressuring domestic producers.

Analysis of 2025 trade data revealed that European producers lost approximately 250 kt of volume to overseas competitors compared to 2024. Market participants broadly acknowledged that this trend was unlikely to reverse soon. Many accepted that the highs of 2021 would not return, with part of the recent decline now viewed as permanent.

Midyear Developments: Entrenched Weakness in Both Regions

By mid-year, the themes that defined the early part of 2025 had become more entrenched. North American demand remained subdued, and construction and infrastructure activity showed little indication of improvement. Operating rates remained around 60 percent, and demand for BPA and epoxy stayed steady but uninspiring. Feedstock fluctuations created brief bursts of activity, but the broader environment—characterized by soft consumption, weak sentiment, and conservative purchasing—remained largely unchanged.

The European market moved along a similarly static path. Demand remained weak across major downstream sectors, and news of permanent capacity closures highlighted the severity of regional competitiveness challenges. Imported Asian material continued to dominate at the expense of domestic supply, while downstream buyers relied on contract volumes and avoided discretionary spot purchases.

Late-Year Conditions: Long Supply and Minimal Momentum

Toward the end of the year, the global phenol and acetone markets settled into a prolonged but relatively stable supply position. In North America, the removal of earlier supply disruptions resulted in a comfortable logistics environment, yet demand remained underwhelming, and buyers showed limited interest in increasing offtake.

In Europe, full-year phenol volumes were projected to decline by several percent, extending a multi-year trend. Imported tonnage remained structurally high, and buyers postponed fresh purchases as long as possible. Oversupply in Asia continued to shape global trade flows, with producers in the region still incentivized to export due to sluggish domestic demand and new capacity additions.

Year-End Perspective: A Market Adjusting to a New Baseline

By the close of 2025, the global market was characterized by the same forces that had shaped its beginnings: muted downstream consumption, continued oversupply, and persistent shifts in trade flows. Structural losses in Europe, weaker export opportunities in the United States, and the competitive weight of Asian production left the phenol and acetone industries facing a gradual but unmistakable recalibration.

Many participants no longer expect a return to previous peak volumes and instead view the current balance as the new baseline for the industry.