02 November 2009 16:37 [Source: ICIS news]
The phenol price generally lags benzene contracts by one month.
Spot prices are also softening as buyers purchase on a hand-to-mouth basis, a seller said. Discussion levels for prompt material have been around 45-50 cents/lb, but little business is getting done, traders, buyers and sellers said.
“Phenol sellers have curtailed production to match demand and are now only producing enough to meet contractual commitments, leaving the spot market largely inactive in the US,” a trader said.
The industry-wide operating rate had been around 60-70% during the third quarter but is now estimated at around 50%, the trader added.
Some phenol market players said prices would move up in November due to the recent hike in benzene values, but others said the lack of demand could keep spot market prices stable until the end of the year. November benzene contracts increased by 9.6% to $2.85/gal, up 25 cents/gal from October.
Phenol buyers said they are expecting a demand drop off in November as buyers begin to destock year-end inventory. In some cases, destocking has already begun, a buyer said.
“Our volumes forecast for November and December is dim to say the least,” a phenol buyer said. “It is not near the severity of this time a year ago, but only a little better.”
Major US phenol sellers include Georgia Gulf, Shell, INEOS Phenol and Sunoco.
($1 = €0.68)For more on phenol visit ICIS chemical intelligence
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