Europe Sept phenol contract down €67/tonne on benzene decrease

02 September 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--The September European phenol contract price has decreased by €67/tonne following the same drop in the cost of feedstock benzene, market participants confirmed on Friday.

September phenol settled on a pre-discounted basis at €1,363–1,403/tonne ($1,947–2,004/tonne) FD (free delivered) NWE (northwest Europe), down by €67/tonne from August, following the September benzene fall.

“Our contract price has moved with benzene. We can get all the volume we need and our demand is steady,” confirmed a major phenol buyer.

Another buyer also confirmed that its phenol contract mirrored price developments in the benzene market.

“Prices are down for contract by €67/tonne, in line for benzene because all contracts are formula.”

In relation to the current supply-and-demand balance of phenol in Europe, the buyer said the market was still in a tight position following INEOS Phenol’s force majeure on phenol, but added that it had enough phenol to cover its downstream demand.

INEOS Phenol lifted force majeure on phenol on 22 August after its feedstock suppliers ended their declarations on cumene. The company declared force majeure on phenol production at its facilities in Gladbeck, Germany and Antwerp, Belgium on 15 July because of cumene supply problems. The company is due to start a four-week planned turnaround in Antwerp, Belgium from 9 September.

On the selling side, phenol suppliers said demand was strong.

One said: “I have seen no decline in our demand for phenol, and we are pretty much sold out but this might be because Antwerp is down and we are getting extra enquiries.”

Meanwhile, in the phenolic resins sector, a resin producer said its order books for September and October were looking very strong for the construction sector.

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.

($1 = €0.70)

For more on phenol visit ICIS chemical intelligence
Please visit the phenol ICIS plants and projects database

By: Julia Meehan
+44 20 8652 3214

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