14 May 2010 13:04 [Source: ICIS news]
LONDON (ICIS news)--The European phenol market was dry outside contractual commitments because of various planned and unplanned outages, coupled with strong domestic end-user and export demand, sources said on Friday.
“We are on allocation, but if things don’t improve soon we will need to put our customers on allocation,” said a phenol buyer for the production of phenolic resins.
In relation to demand, the buyer said that it had improved but it was not clear if this was simply because competitors were unable to secure phenol.
“Demand is slightly improved and we have turned down some orders. But there is a question mark. Is it because our competitors can’t supply?” the phenol resin producer said.
The BPA producer said: “We are able to manage our demand. There has been no panic, desperate customers, BPA producers adding surcharges...this is rubbish.”
The producer confirmed that it had to “fight” for its phenol but this did not impact on BPA contract customers. “Some BPA was affected, but this was only for spot,” he concluded.
Phenol producers continued to view the market as critically tight. Market followers felt that it would only take one unexpected hiccup to make the supply situation even more serious.
“There is panic, people still crying for product and the are plenty [of buyers] asking for trucks. No imports are coming and there is not a drop outside contract. If I had material I could sell it at benzene plus €600/tonne ($1,250/tonne),” the trader added.
In other derivative markets related to phenol, such as caprolactam and adipic acid, demand remained very strong compounded by the weaker euro making exporting far more attractive, for caprolactam producers in particular.
“Caprolactam is a nightmare at the moment, even producers who wouldn’t normally export are now doing so because the price in ?xml:namespace>
A European producer of caprolactam said, “From every big buyer were are receiving requests for June but lots of product is going to
($1 = €0.80)
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