Zhong Guo Hua Gong Bao·2025-09-16 02:45Core Viewpoint - The phenol ketone industry is expected to recover from losses as supply and demand dynamics improve after a peak in production capacity [1] Supply Dynamics - Since 2007, domestic phenol ketone capacity has consistently increased, growing from 1.039 million tons to 11.26 million tons by July 2025 [2] - Significant expansions occurred in 2012, 2015, and 2023, with a net increase of 7.87 million tons over the past decade [2] - The trend is shifting towards larger and more integrated production facilities, with major projects launched by companies like Zhejiang Petrochemical and Wanhua Chemical [3] - Capacity growth is expected to slow down in 2024, with only 130,000 tons of new capacity projected [3][4] - The supply side is anticipated to improve due to the planned reduction of outdated production lines and the closure of some overseas facilities [4][5] Policy Direction - The industry has faced challenges due to an oversupply situation, leading to a shift from high profitability to losses [4] - The Chinese government has introduced policies to combat "involution" in various industries, including phenol ketone, to stabilize market conditions [4][6] - The Ministry of Industry and Information Technology is focusing on structural adjustments, eliminating outdated capacity, and promoting new growth points [4] Demand Trends - Demand for phenol ketone remains robust, particularly driven by the steady growth of polycarbonate (PC) and bisphenol A (BPA) [7] - The compound annual growth rate (CAGR) for PC demand is projected at 17.95% from 2019 to 2024, supported by trends in consumer electronics and automotive lightweighting [7] - BPA, a critical link in the phenol ketone supply chain, is expected to see a CAGR of 28.93% during the same period, although competition may lead to project delays [7] - Overall, the industry is entering a phase of supply-demand optimization, with potential for profit recovery driven by policy support and steady demand growth [7]