30 December 2010 11:06 [Source: ICIS news]
By Julia Meehan
LONDON (ICIS)--European phenol availability will remain tight on strong domestic and export demand for the petrochemical and its derivatives, market sources said.
Bisphenol A (BPA), which accounts for 30% of phenol demand, is expected to remain strong throughout 2011 and into 2012, largely in the key Chinese market but also in ?xml:namespace>
“We are preparing for the [Christmas] run on a slower pace but expect healthy demand in January. We are also expecting phenol to be structurally more expensive than 2010 because of the lack of capacities. We hear phenol producers will be better covered. We are waiting to see,” said a major BPA producer looking ahead to 2011.
Since the economic downturn took hold in 2008, CEPSA Quimica has idled one of its three phenol lines in
Owing to insufficient production in the key Chinese market and higher prices across the region, European caprolactam producers with flaking facilities will continue to export to Asia because the differential over benzene is far greater than in
“European buyers must start to realise that they are now in direct competition with Asian buyers who want most long-term fixed contracts in order to guarantee volumes,” a global producer of caprolactam said.
A caprolactam buyer said: “Caprolactam producers are looking to Asia, deducting volumes from
A similar scenario is expected for adipic acid, which in recent months has been exported from Europe to Asia because of record high prices in
The adipic acid market is also expected to continue to feel structural pressure after the closures of Invista’s 270,000 tonne/year facility at Wilton in the UK, and sites in the US and Canada, resulting in around 20% of global production being taken out of the market.
Invista’s closure in the
A surprise turnaround for the phenol market has been the strong resurgence of demand for phenolic resins in 2010, a trend which looks set to continue into 2011.
“Demand is still very healthy and the insulation sector is going very well. Our forecast is very strong for next year. We are pushing volumes and are being very optimistic,” said a major phenolic resin producer.
As with other buyers of phenol, the phenolic resin producer was concerned about phenol availability in
“I have spoken to the major producers, but there is some uncertainty of product availability from smaller producers,” the source added.
Helena Strathearn contributed to this article
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