In 2025, the phenolic ketone industry will usher in a crucial year of structural adjustment. The policy direction of “anti internal competition” is clear, promoting the transformation of the industry from low price competition to high-quality development; The production capacity side presents the characteristic of “old and new rotation”, with the concentrated release of new production capacity and the parallel exit of outdated production capacity; The imbalance between supply and demand in the market is intensifying, prices are deeply declining, and industry profits are under pressure; Technological innovation focuses on green, low-carbon, and efficient utilization, and the trend of industrial chain integration is becoming increasingly prominent. The following is a summary of the core events of the year:
1、 Policy led transformation: dual wheel drive of environmental protection and anti involution policies
-At the beginning of the year, the upgrading of domestic environmental protection standards was implemented. Starting from 2025, the newly revised “Emission Standards for Volatile Organic Compounds in the Petrochemical Industry” will be officially implemented, clarifying the requirements for VOCs emission control of phenol and ketone production enterprises, forcing small and medium-sized production capacity to accelerate the upgrading of environmental protection equipment, and further raising the industry access threshold. At the same time, the supporting implementation rules of the “Guiding Catalogue for Industrial Structure Adjustment (2024 Edition)” have been released, clarifying the elimination standards for outdated production capacity in the phenol ketone industry (mainly for devices that have been in operation for more than 20 years and have a scale of less than 300000 tons/year), and setting a red line for optimizing the industry structure.

-In March, the National People’s Congress and Chinese People’s Political Consultative Conference emphasized the need to combat internal competition in the chemical industry. During the conference, “breaking down local protectionism and market segmentation, and rectifying internal competition” became a hot topic in the chemical industry. It was clarified that the phenol ketone industry needs to achieve efficient and intensive development through supply-demand matching and structural upgrading, and a supply side optimization model driven by policy guidance and market mechanisms was gradually established.
-Throughout the year, the EU REACH regulation has been strengthened with compliance requirements. The EU has updated the REACH regulation, added four restrictions on phenolic ketone substances, and put forward stricter requirements for the supply chain traceability and carbon footprint certification of phenolic ketone derivatives. Domestic export-oriented phenolic ketone enterprises have accelerated the construction of compliance systems to cope with green trade barriers.
2、 Capacity restructuring: Concentrated release of new capacity, accelerated exit of old capacity
-In the first half of the year, the phenol ketone unit of Fuyu Chemical was put into operation as the first batch of new production capacity in 2025. The phenol ketone unit of Fuyu Chemical was successfully put into operation, and the total domestic phenol ketone production capacity exceeded 10.48 million tons per year, further highlighting the loose supply side pattern.
-June: The old units of Yanshan Petrochemical and Jilin Petrochemical officially withdrew from the phenol and ketone units that have been in operation for over 20 years. There is no clear plan to restart them, and they have been removed from the total industry production capacity, with a total withdrawal capacity of about 400000 tons per year. The proportion of old production capacity has decreased to below 7.54%.
-In July, the 650000 tons/year phenol ketone plant of Zhenhai Refining and Chemical was put into operation, and the large-scale phenol ketone plant of Zhenhai Refining and Chemical successfully produced qualified products. After the commissioning, the domestic phenol ketone production capacity exceeded 11.26 million tons/year, and the proportion of production capacity in the East China region increased to over 70%, further strengthening the regional production capacity cluster effect.
-At the end of the third quarter, Jilin Petrochemical’s 350000 tons/year new plant was put into operation. Jilin Petrochemical’s 350000 tons/year phenol ketone plant was completed and put into operation, achieving stable output in the fourth quarter, directly exacerbating the supply pressure in the Northeast and North China regions, and the industry operating rate rebounded to around 75%.

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Throughout the year, multiple sets of phenol ketone units, including CNOOC, Huizhou Zhongxin Phase I, and Gaoqiao Petrochemical, have entered a long-term shutdown state due to long-term shutdown adjustments. The total shutdown capacity is 890000 tons per year, which offsets the 1.35 million tons of new production capacity added throughout the year. The net increase in production capacity is about 460000 tons, and the supply pressure has not yet eased.
3、 Market volatility intensifies: prices deeply decline, profit margins continue to compress
-June July: Mainstream enterprise maintenance caused short-term supply tightening. Multiple core phenol ketone units, including 650000 tons/year for Wanhua Chemical, 560000 tons/year for Shanghai Xisa, and 400000 tons/year for Sinopec Mitsui, were shut down for maintenance. Among them, Wanhua Chemical had a maintenance cycle of up to 45 days, which temporarily reduced market supply and drove phenol prices to remain firm in the short term.
-October December: Phenol prices hit a five-year low, with a decline of over 15%. In the fourth quarter, the phenol market entered a period of deep adjustment. Affected by the triple negative factors of new production capacity release, weak downstream demand, and weakened raw material prices, the cumulative decline in phenol prices in the East China market reached 15.44%. At the end of the year, the mainstream quotation converged at 5750-5850 yuan/ton, reaching the lowest level in nearly five years, and the annual average price fell by 13.44% year-on-year.
4、 Technology and industrial upgrading: Innovation focuses on green and efficient, integrated models become mainstream
-Throughout the year, patent applications have continued to grow, with catalysis and energy-saving technologies becoming hot topics. From 2020 to 2025, the average annual growth rate of patent applications related to phenol and ketone in China is 14%. In 2025, the focus will be on catalyst modification, wastewater treatment, low-energy processes, and comprehensive utilization of by-products. The popularization rate of direct oxidation process will increase, and the application proportion of emerging catalyst systems will increase to 30%.
-Within the year: Leading enterprises accelerate the integration of the industrial chain layout. Multiple leading enterprises in the Yangtze River Delta have connected the entire industry chain of “phenol acetone bisphenol A polycarbonate” through mergers and acquisitions. Some enterprises have also built supporting photovoltaic power stations, achieving a 15% reduction in energy costs and responding to market pressure through differentiated competition.
-Throughout the year, the expansion of emerging application areas has accelerated the penetration rate of high-purity phenolic ketone products in new energy battery packaging materials, electronic grade phenolic resins, special epoxy resins, and other fields. The procurement volume of phenolic intermediates in the medical disinfection field has increased by 12% compared to 2023, becoming a new bright spot for demand growth.

5、 Adjustment of Trade Pattern: Enhanced Export Orientation and Deepening of Regional Trade Network
-Throughout the year, China’s phenolic ketone exports have steadily increased due to overcapacity, driving export-oriented development. By 2025, China’s phenolic ketone exports are expected to exceed 850000 tons, mainly flowing to Southeast Asia and the Middle East, gradually shifting from a net importer to a regional exporter.
-Fourth quarter: Import replenishment intensifies domestic supply pressure. Phenol imports from the East China region continue to arrive at ports, with a total of 49700 tons arriving in December. Although port inventories are temporarily stable, expectations for in transit shipments continue to suppress market prices.
-Throughout the year, the trend of regional trade highlights the increasingly tight network of phenolic ketone trade within Asia. Europe’s dependence on imports has risen to 35% due to the closure of old facilities. The global supply chain layout is shifting towards regionalization and nearshore operations, and shipping costs and green trade barriers have become key factors affecting trade flows.
Overall, in 2025, the phenolic ketone industry will accelerate structural adjustment under policy guidance, with capacity expansion and elimination going hand in hand. The imbalance between market supply and demand will lead to a deep decline in prices, putting pressure on industry profitability. In the future, technological innovation, industrial chain integration, and green transformation will become the core direction for the industry to break through “internal competition” and achieve high-quality development.