US phenol/acetone buyers see surcharges

02 June 2008 17:38  [Source: ICIS news]

HOUSTON (ICIS news)--Georgia Gulf has notified its customers it would implement an energy surcharge on all phenol and acetone invoices effective on 1 June, a buyer said on Monday.

The current pricing structure for both phenol and acetone does not capture the rapidly escalating cost of natural gas, which is the single greatest process cost in production, Georgia Gulf said in a letter to its buyers.

The May contract price for phenol recently increased by 2 cents/lb to 80 cents/lb ($1,764/tonne or €1,129/tonne) freight equalised (FRT EQ), according to global chemical market intelligence service ICIS pricing.

“While the recent phenol hike included some of the higher feedstock prices, it did not factor in high production costs,” a seller said.

The monthly calculation of Georgia Gulf’s surcharge will be based on the price of natural gas.

The phenol surcharge will be calculated as $0.005 cents/lb per $1.00/m Btu greater than $7.00/m Btu per the monthly Henry Hub Index.

The acetone surcharge will be calculated as $0.003 cents/lb per $1.00/m Btu greater than $7.00/m Btu per the monthly Henry Hub Index.

Phenol and acetone are co-products of cumene feedstock.

“The steady rise in feedstocks and energy this year has resulted in a margin squeeze but passing on the costs has not been possible,” a seller said.

Other major US phenol and acetone sellers including Shell, Sunoco and INEOS Phenol have not stepped out with any surcharges at this time. However, all discounts, rebates and previous temporary voluntary allowances (TVAs) are now gone, a distributor said.

($1 = €0.64)

To discuss issues facing the chemical industry go to ICIS connect
For more on phenol and acetone visit ICIS chemical intelligence

By: Heather McGuire Doyle
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly