04 June 2008 09:49 [Source: ICIS news]
By Liu Xin
BUDAPEST (ICIS news)--Phenol producers are seeking price hikes in Asia on surging upstream costs and an expected tightening of supply due to production cuts in the region, as well as limited availability of deep-sea cargoes into Asia, traders and sellers said.
Mitsui pegged its June Asia contract price (ACP) for phenol at $1,850/tonne CFR (cost and freight) China, inclusive of anti-dumping duties of 6%. This was a $300/tonne increase from May settlements at $1,550/tonne.
Other sellers were also targeting price increases due to prevailing high upstream propylene and benzene feedstock costs, but acknowledged that price gains could be moderate.
"The market should improve as feedstock prices are high and supply is tight, but it would take some time for the Chinese market to accept any substantial hikes," one Asian producer said on the sidelines of the 5th ICIS World Phenol/Acetone Conference here on Tuesday.
"The Chinese domestic prices remain weak, and importers are cautious to import at prevailing prices," said an Asian trader.
Phenol spot prices were assessed $10-40/tonne higher at $1,530-1,600/tonne CFR China last week, according to global chemical market intelligence service ICIS pricing. Regional cargoes exempted from anti-dumping duties (ADD) totalling 2,000 tonnes were heard sold at $1,600/tonne for June lifting.
Fresh offers of the regional cargo were now pegged at $1,650/tonne, but importers were largely sidelined, with notional buying ideas capped around $1,580/tonne.
Offers of European cargoes were scant due to tight export availability.
"We are currently out of the export market," said a European producer, adding that the tight situation might last into the third quarter.
Another European producer also said that it had limited export volumes for the Asian market, as it had cut back operations substantially due to poor economics.
Some buyers, however, maintained that they were in no hurry to procure fresh cargoes due to weak domestic prices in the key China market, which were lingering at CNY13,300-13,600/tonne ($1919-1962/tonne) ex-tank.
Separately, statistics from China Customs showed phenol imports fell 3% to 33,185 tonnes in April compared with March volumes, and were down 1% from the same month a year earlier.
The two-day conference runs from 3-4 June.
($1 = CNY6.93)
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