Phenol shortage lifts price by $150/tonne in Asia

30 September 2002 03:05  [Source: ICIS news]

SINGAPORE (CNI)--Asian phenol prices have shot up by $150/tonne in just two weeks to touch their highest level this year at $770-780/tonne cfr China.

The market rally has been fueled by worries of a significant supply disruption after a major US exporter to Asia – Ineos Phenol – declared force majeure following an explosion which completely knocked out its 400 000 tonne/year plant in Mobile, Alabama on 9 September.

The problem has been compounded by several plant turnarounds in Asia, which have further tightened regional supply, resulting in phenol buyers and customers desperately scurrying for material.

Phenol downstream markets have been significantly influenced by the snug availability, with prices of bisphenol-A, polycarbonate and epoxy resins also shooting up by $100-150/tonne over the past two weeks.

Acetone, which is usually co-produced with phenol, also saw steep price hikes due to tight supply and increased demand. October offers last week were at $600/tonne fob Taiwan. The last reported business in September was at $480/tonne fob NEA.

But all eyes are on phenol, with market watchers expecting prices to hit the $800/tonne cfr China level in October. Some believe it could even surpass this level to touch $900/tonne cfr China. The last time such pricing was seen was in 1995.

This week in SEA, spot phenol was transacted at $750/tonne cfr SEA for small parcels of 500 tonne. For bigger cargoes of between 800-1000 tonne, business was settled at slightly over $700/tonne cfr SEA.

In Northeast Asia, end-September business was settled a $700/tonne fob Taiwan, which is equivalent to $750/tonne cfr China. Domestic prices in China have also registered steep gains, with several deals reported at Rmb7600-8000/tonne, which translates to about $770-780/tonne cfr China.

A Japanese trader noted that Chinese domestic prices had spiked by Rmb700-800/tonne since mid-September.

Industry watchers said with the Ineos Phenol plant in the US expected to be out of action until the end of this year, prices were certain to go up even more in the coming weeks. A plant shutdown in Singapore could also add to the problem.

Mitsui Chemicals Singapore has shut down its 200 000 tonne/year plant for 45 days from 1 October to facilitate a debottlenecking exercise to expand capacity by an additional 50 000 tone/year. The expanded facility is only expected to come onstream on 15 November.

Mitsui Chemicals’ 200 000 tonne/year phenol plant in Chiba, Japan, is also due to halt operations on 8 October for 30 days for a scheduled maintenance shutdown. It will restart in early November.

By: Ravi Nambiar
+65 6780 4359

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