Europe May phenol rises €19/t on benzene hike

09 May 2008 23:59  [Source: ICIS news]

LONDON (ICIS news)--The May phenol contract price was settled  €19/tonne ($29/tonne) higher than April numbers on the back of firmer benzene values, producers and consumers said on Friday.

  

Across the board, European producers confirmed that May phenol pre-negotiated contract prices were agreed at €1,235-1,275/tonne FD (free delivered) NWE (northwest Europe), up €19/tonne from April, following a similar rise for upstream benzene in May.

 

“It was easy for us to move phenol prices up €19/tonne,” said a large producer.

 

However, reports differed regarding freely negotiated contracts. Two producers said they had only partially recovered that €19/tonne benzene increment.

 

Demand for phenol remained healthy according to sellers with inventories snug following INEOS Phenol’s six-month force majeure at its Antwerp facility in Belgium.

 

Despite reports of a tight supply situation in Europe, a major consumer said that it “could swim in phenol”. 

Other market sources on the buy side said Europe was balanced rather than tight. 

 

This week some sellers hinted that phenol, and subsequently acetone, operating rates could be cut back.

 

This came as no surprise to market participants, many of whom said the situation in the acetone market was a “disaster”.

 

“Acetone prices have barely moved in two years and we need to do something,” said a producer.

 

“The tide is turning,” commented another producer. “Producers need to restore the market.”

 

Acetone is a by-product of phenol production.

 

($1 = €0.65)

By: Julia Meehan
+44 20 8652 3214

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