03 February 2012 14:17 [Source: ICIS news]
LONDON (ICIS)--The February European phenol contract price has increased by €116.50/tonne, which is an average of the €114–119/tonne delta movement in the February benzene contract settlement, phenol producers and consumers said on Friday.
The February phenol contract price settled on a pre-discounted basis at €1,543–1,583/tonne ($2,030–2,083/tonne) FD (free delivered) NWE (northwest Europe).
The phenol contract in Europe is 100% formula-related to the European benzene contract price.
Demand for phenol in January and early February has been surprisingly healthy, producers and a majority of consumers agreed. Some sources even said their demand has exceeded original expectations.
In the phenolic resins market, a producer said: “January volumes were higher than expected even if you count in restocking, and February is also looking good.”
“The markets are good, week to week, month to month, and we have no worries. The market is still cautious but we won’t find ourselves in the same situation as 2008. We are confident it won’t get that bad,” said a major producer of caprolactam, who also exports large volumes of flakes caprolactam to Asia.
The market for adipic acid, which is used in the production of nylon 6,6 (polyamide 6,6), is the weakest in the phenolic chain. A large proportion of adipic acid is exported to Asia.
“Adipic acid and nylon are below our expectations. Consumption is lower, but we can survive. I think for nylon 6,6 the situation is getting better but for the adipic acid market I am not so sure,” said a European producer of both materials.
Despite concerns about phenol availabilty in the coming months because of plant shutdowns at CEPSA Quimica and INEOS Phenol, buyers appear relaxed about availability for the moment, however, this could change depending on the start-up successes of both these major phenol producers in March and April.
($1 = €0.76)
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