04 May 2012 23:59 [Source: ICIS news]
LONDON (ICIS) The European May phenol contract price has increased by €58/tonne, mirroring the increase in feedstock benzene, producers and consumers confirmed on Friday.
The May phenol contract price settled on a pre-discounted basis at €1,512-1,552/tonne FD (free delivered) NWE (northwest Europe) ($1,989-2,042/tonne FD NWE). The phenol contract in Europe is 100% formula-related to the European benzene contract price and the supply/demand balance has no influence on the settlement.
Demand for phenol has been steady to strong during the first quarter, but downstream demand across the phenolic chain is slowing, particularly for those markets that are heavily influenced by developments in China.
Phenol availability has also improved following a first quarter riddled with production problems and shutdowns.
Looking at its phenol demand in May, a producer said: “Our demand for May is very soft and everybody is cautious. End-users are not even giving us a forecast for the entire month.”
This is partly due to a drop in demand for exports to Asia, but also because prices are high and margins are being eroded.
Demand is not strong enough in some downstream markets to achieve price increases for non formula-related contract customers.
In the epoxy resin market, for example, a producer is targeting an increase of €100/tonne, but buyers are resisting because demand is weak.
For caprolactam, buyers said they will be pushing for a reduction in their May contract prices despite an increase in benzene.
A seller of phenol to the adipic acid market said its customer was “suffering” because of poor demand for nylon.
($1 = €0.76)
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