02 August 2012 18:44 [Source: ICIS news]
HOUSTON (ICIS)--A sharp drop in second-quarter US phenol production numbers that were released on Thursday reflects weak exports and stable domestic demand.
US Q2 phenol production was 384,425 tonnes, down by 24% year on year from 505,678 tones produced in the second quarter of 2011, according to data released by the American Fuel & Petrochemical Manufacturers (AFPM).
Quarter on quarter, phenol production fell by 15% from 451,734 tonnes produced in the first quarter of 2012.
The biggest reason for the production decline was a drop-off in demand from Asia, which was the key export region for US material.
With US phenol producers having difficulty shipping material into Asia at high margins, operating rates were pushed down in the second quarter to the 75-80% range, sources said.
Additionally, the US construction market kept US demand for phenol mostly steady.
As the quarter wound down, feedstock benzene prices surged, further cutting into margins and pushing down operating rates.
Year-to-date phenol production is down by 26% year on year, at 749,117 tonnes in 2012 compared with 1,007,760 tonnes in 2011.
US phenol producers Dow Chemical, Georgia Gulf, INEOS Phenol, and Shell Chemical contributed to the AFPM’s data.
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