Processes for producing highly reactive low viscosity modified phenolic resins include polycondensation of soybean heavy oil or pitch, formaldehyde polymers and phenols in the presence of an acid catalyst to produce modified phenolic resins; Reacting the resulting modified phenolic resin with phenol in the presence of an acid catalyst at a temperature higher than 120 ° C. and not higher than 200 ° C. to lower the molecular weight of the modified phenolic resin. The highly reactive low viscosity modified phenolic resin obtained according to this method has high reactivity with epoxy resin and low resin melt viscosity. Resin can also be used to produce molding materials having good moldability and relatively low water absorption when combined with epoxy resins.
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