18 June 2012 11:51 [Source: ICIS news]
By Julia Meehan
Phenol producers and consumers are gravely concerned about macroeconomic conditions, not only in
A common problem for downstream sectors including bisphenol A (BPA), phenolic resins, caprolactam (capro), alkylphenols, aniline and adipic acid is margin erosion, lack of export opportunities and the threat of competitively priced imports.
The “potential” for another increase in the benzene contract price would create even more pressure since margins are already very squeezed.
The June benzene contract price, which settled at an increase of €73/tonne ($92/tonne), came as a shock to the market. Benzene bucked the trend of just about every other upstream market, where prices decreased for June.
An increase in the July benzene contract price would prove very difficult for the phenol market to pass on further downstream, despite many contracts linked to formulas.
The gap between European and Asian phenol and benzene is a problem and a worry.
European spot benzene is currently bid at $1,310/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp), while is Asia it is valued at $990-1,005 FOB (free on board)
July benzene, meanwhile, is significantly lower in Europe at $1,160-1,210/tonne ARA, but still higher than in
In the spot market, phenol in Europe is valued at €1,350-1,360/tonne FD (free delievered) NWE (northwest Europe) or $1,709-1,722/tonne, while in
“Another increase in the price of benzene will be incredibly damaging to our business,” commented a BPA producer who is also exporting to
Adding to the pressure are competitively priced imports of epoxy resins and polycarbonates from South Korean being offered at competitive levels in Europe, as well cheap imports BPA from
Phenol producers in
“The market to me feels like it’s already July, it is very quiet,” said a major consumer.
Typically, operating rates both up and down the phenol chain are reduced during the summer with some plants scheduled to shut down.
Both producers are currently building inventories ahead of their respective outages and some sources feel that although neither producer is a major supplier in
The future dynamics of the global phenol market will be discussed in detail later this week at the 7th World ICIS Phenol and Acetone conference in
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