Europe August phenol falls €12/tonne on benzene decrease

06 August 2010 23:59  [Source: ICIS news]

LONDON (ICIS)--The European August phenol contract price has decreased by €12/tonne ($16/tonne) from July as a result of a fall in the price of the feedstock benzene, phenol producers and consumers confirmed on Friday.

The August phenol pre-discounted contract price settled at €1,162-1,202/tonne FD (free delivered) NWE (northwest Europe).

The August benzene contract was agreed at €668/tonne FOB (free on board) NWE (northwest Europe), also down €12/tonne from July.

Despite the tight supply situation, the phenol contract price has moved down because it is fully linked to a benzene price formula.

“I can confirm that phenol went down €12/tonne with benzene. Phenol demand is very good and very strong. We are sold-out and are unable to take any spot orders,” said a major producer.

Referring to the phenol contract price, a second European producer said: “For phenol, it’s the same story: contract down with benzene. There is still very good demand and the market remains challenging.”

A major phenol buyer confirmed that its August contract price moved down €12/tonne and that its demand for downstream bisphenol A (BPA) was healthy.

“The €12/tonne drop in benzene will definitely be passed on. BPA demand is still strong and phenol is tight, but I am feeling that maybe availability is a little easier,” said the buyer.

A distributor of phenol said that demand remained at a high level not only in Europe, but also in Asia. He said that European producers were favouring exporting material to Asia rather than selling it locally.

“There is still good demand and producers are shipping every available molecule to Asia. I heard offers at $1,600 FOB (free on board) for Asia,” said the trader.

The main chemical intermediates and derivatives of phenol are BPA, which is used to make polycarbonate (PC), and epoxy resins, phenolic resins, caprolactam, alkylphenols, aniline and adipic acid.

($1 = €0.76)

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By: Julia Meehan
+44 20 8652 3214

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