06 May 2011 13:38 [Source: ICIS news]
LONDON (ICIS)--The May European phenol contract price has increased by €29/tonne ($42/tonne) following the same increase in the value of the May benzene contract price, producers, consumers and distributors confirmed on Friday.
May phenol settled on a pre-discounted basis at €1,433-1,473/tonne FD (free delivered) NWE (northwest Europe), up €29/tonne from April following the the May benzene increase.
“The market remains tight and as always our contract simply followed benzene. Our demand is still good but we can get all we need,” said one major buyer.
A second large buyer, consuming phenol for the production of bis-phenol A (BPA) said: “Our BPA demand is good and phenol is still tight. The contract for May will increase by €29/tonne because of benzene.”
Major producers also confirmed that their contracts moved up by €29/tonne in May because of feedstock benzene. Phenol contracts in Europe are 100% linked to feedstock benzene, with the supply-and-demand dynamics of the market having little influence over the contract price.
In relation to the curent supply and demand balanced in Europe, a major producer said: “Demand is very strong and for export opportunities we are very limited.”
The producer added that its phenol contract price will mirror the benzene price increase.
Meanwhile, spot phenol, although limited, can command a premium of up to €400/tonne over the benzene contract price.
Although being out of the spot market, another major producer said: “You can ask what you want, people are willing to pay anything - €600-700/tonne over benzene, these people will pay this price”.
The producer hinted that the interested buyers were largely based in the east of Europe, where the only local producer, Slovnaft, is due to permintantly shut its phenol/acetone production from 30 June.
The company will close its plant, which has the capacity to produce 40,000 tonnes/year of phenol and 25,000 tonnes/year of acetone, for economic reasons.
($1 = €0.69)
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