22 July 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European July bisphenol-A freely negotiated contracts settled €160/tonne down at €1,700–1,800/tonne FD (free delivered) NWE (north-west Europe) because of declining feedstock costs, slowing demand and increasing imports from Asia and Russia, sources said on Friday.
Market players said this is because conditions have improved a lot since the start of the year, when the market was very tight.
"Before April the market was extremely tight, whereas now conditions have improved a lot and there are no constraints on the market," said a market player.
The events at INEOS Phenol, which last week declared force majeure to its phenol customers, dominated talks. Many fear market conditions may deteriorate again if the force majeure continues until September, when demand is expected to pick up.
INEOS Phenol will also carry out planned maintenance in September for four weeks, for which it would normally stock up now, but is prevented from doing so by the cumene supply problems.
A number of producers fear that if the force majeure lasts until the planned maintenance it could cause supply shortages on the market.
"The news about INEOS Phenol has made a lot of people uncertain about the future, especially producers, who fear they will not be able to buy enough phenol on the market," said a BPA producer.
Buyers, on the other hand, said there is plenty of product coming in from Asia and ?xml:namespace>
Formula-related July BPA contracts are at €1,500–1,750/tonne FD NWE because of declining feedstock costs.
However, because benzene and phenol is set to increase in August, formula-related BPA contracts are likely to follow. On Wednesday, August benzene spot prices were around $1,240–1,245/tonne CIF ARA, which is €126-130/tonne above the July contract price which settled at €754/tonne CIF (cost, insurance and freight)ARA (Amsterdam-Rotterdam-Antwerp).
BPA spot prices are at €1,650–1,800/tonne FD NWE. One buyer and a producer reported spot at €1,500–1,590, but this is not representative of the market.
Supply is healthy, with increased imports from Asia and
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