03 June 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--The European phenol contract price for June has fallen by €55/tonne ($80/tonne) from May because of a similar decrease in the benzene contract price, market sources said on Friday.
June phenol settled on a pre-discounted basis at €1,378–1,418/tonne FD (free delivered) NWE (northwest Europe), down €55/tonne from the May contract price.
“Due to the benzene decrease of €55/tonne, phenol has also come down by the same amount,” said a major producer.
“Phenol is extremely tight and demand from all sectors is good. There is no spot available to offer,” added the producer.
Buyers agreed that supply is short, and they reacted positively to the decrease.
“All our contracts are linked to benzene. It’s good that phenol is down. The demand is softening a little, but phenol will sell easily at this price…the market is still tight,” said a one buyer.
The May phenol contract had settled at an increase of €29/tonne at €1,433–1,473/tonne FD NWE.
The phenol contract price in Europe is 100% linked to that of the feedstock benzene, with the market's supply-demand dynamics having little influence over the contract price.
The major uses of phenol involve converting it into plastics or related materials. Condensation with acetone produces bisphenol A, a key building block for polycarbonates. Condensation with formaldehyde produces phenolic resins.
($1 = €0.69)
For more on phenol and benzene, visit ICIS chemical intelligence
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