20 May 2010 16:28 [Source: ICIS news]
LONDON (ICIS news)--The European phenol and bis-phenol A (BPA) markets have become even tighter because of a second force majeure on phenol and acetone further limiting availability, particularly of phenol, market sources said on Thursday.
Austria-based Borealis declared force majeure on phenol and acetone on Friday 14 May.
A company spokesperson said: “Borealis has problems in its phenol unit and has declared force majeure on some phenol grades. The unit was down for planned maintenance and we experienced problems when we restarted.”
In the meantime it was confirmed the force majeure was also on acetone.
A source close to Borealis said: “Because the benzene content in the phenol is too high, it has prevented them from supplying certain sectors because of impurities in phenol and acetone.”
The high benzene content in the phenol was largely impacting on bis-phenol A (BPA) customers, sources said.
“As they [Borealis] can still supply the resins market it’s not so much of a big issue, but the phenol market is still very tight,” a phenol and acetone trader said.
“Customers are looking for additional volumes. It’s extremely tight and this will continue until the end of June. This is the main issue – nothing is available,” the trader added.
One major European BPA producer described the situation as "another disaster for the market".
A major phenol buyer that produces BPA said: “The phenol supply to the bis-phenol (BPA) market is extremely tight. I am spending my time getting quantities and shuffling around volumes. Everybody is just hoping that CEPSA will re-start soon.”
Meanwhile, a BPA producer described the feedstock situation as “unbelievable” and said it was just about meeting contractual obligations while running at only 60% of capacity.
Another BPA producer said the market was “simply horrible”.
Meanwhile, a BPA trader said: “You could sell BPA at any price now. It’s really frustrating,”
Borealis’s force majeure comes after CEPSA Quimica declared force majeure on phenol and acetone from its plant at ?xml:namespace>
Earlier that same week, INEOS Phenol announced it had put phenol customers on 85% allocation for phenol contract volumes because of problems with the availability of raw materials.
The company has since started a 14-day planned turnaround at its site at
The phenolic resins market was also feeling the effects of the lack of availability in the European phenol market.
A major phenolic resin producer said the supply issues were impacting “a little bit” on its production. However, it said if problems continued into June, which many sources believed they would, the situation could get very serious.
Echoing a sentiment shared by many players in the European phenol market, a phenol distributor said: “The problems at Borealis could not come at a worse time. I thought it could not get any worse. There is no product.”
However, despite the current supply problems the value of phenol has not been impacted upon as phenol contracts are inextricably linked to benzene prices.
Helena Strathearn contributed to this article.
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