01 June 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--The European June phenol contract price has increased by €73/tonne following the same increment in the June benzene contract, phenol producers and consumers said on Friday.
The June phenol contract price settled on a pre-discounted basis at €1,585–1,625/tonne ($1,957–2,006/tonne) FD (free delivered) NWE (northwest Europe).
The phenol contract in Europe is largely linked to feedstock benzene price movements, although a quarterly fee is also an influencing factor for some producers and consumers in Europe.
“Well get an increase on a [benzene] formula, but the benzene increase is making some problems for us,” said one buyer.
Downstream in the epoxy resins market, a buyer said: “It is going to be very difficult to recover an increase in benzene because our demand is so weak. Our customers want decreases, not increases.”
The phenol market has clearly moved from a very tight position in the first quarter that was caused by production problems and an unexpected high level of demand, and the European market has now levelled out.
Phenol producers across Europe are now running normally and although demand is claimed to be slowing further downstream, they say they are not seeing any sign of this in their phenol order books.
“I’m not seeing any reduction [in phenol orders]. There has been a lot of talk. I want to see forecasts, not just words,” said a European producer.
The producer added that while its customers were complaining of poor margins, this was not being reflected in the offtake of volumes.
($1 = €0.81)
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