28 February 2012 06:52 [Source: ICIS news]
By Liu Xin
Spot phenol prices rose by $25-40/tonne (€18-30/tonne) week-on-week to $1,525-1,560/tonne CFR (cost and freight)
Operating rates at regional phenol facilities had been trimmed to 60-80% since the third quarter of last year until late January this year because of poor economics.
The spread between phenol and feedstock benzene narrowed to $100-200/tonne in November and December 2011, which is considered unhealthy by industry players as a break-even level should be at least $300/tonne.
Asian phenol prices witnessed a brisk rebound in the second half of December 2011 and have remained on a steady uptrend, gaining 37%, or $400/tonne, from mid December 2011 levels, triggered by tight supply following production cuts at regional phenol facilities.
Most regional phenol facilities have resumed full operation since early February following an ease on cost pressure.
However, supply is tightening because of a shortage in deep-sea cargoes, which account for over 30% of monthly phenol imports into
The arbitrage window to move cargoes from the
“Phenol prices are likely to remain firm in March and April,” a regional trader said.
Spot benzene prices were at $1,190-1,200/tonne FOB
Meanwhile, it remains uncertain if there will be further delays in the start-up at Kingboard’s 320,000 tonne/year phenol/acetone plant in eastern China, market sources said.
The facility was initially scheduled to come on stream in March, but test runs have been delayed because of the sharp rise in feedstock benzene and propylene costs.
Phenol buyers in the key
“We have been looking for fresh [phenol] cargoes, but offers are limited,” a Chinese trader said, who added that regional producers generally prefer to delay negotiations amid an upbeat price outlook.
($1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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