US spot prices for phenol, acetone rise on feedstocks

03 August 2012 19:33  [Source: ICIS news]

HOUSTON (ICIS)--US spot prices for co-products phenol and acetone moved slightly higher on the low end of their ranges, sources said on Friday.

US spot phenol prices were assessed 1 cent/lb ($22/tonne, €18/tonne) higher, tracking a surge in the feedstock August US benzene contract that pushed to a record-high settlement.

This puts US phenol spot prices at 62-66 cents/lb FOB (free on board), which would track back to deals done at benzene costs or at 4 cent/lb above benzene.

Sources said buying interest for US spot phenol remains weak, especially into Asia, with more deals being heard into Latin America.

Meanwhile, co-product acetone spot prices were assessed 2 cents/lb higher, pushing ICIS assessed prices to 40-46 cents/lb FOB.

The tightening of spot acetone prices is also being fuelled by the surge in benzene.

With phenol producers losing much of their margins over feedstock benzene because of weak demand, they have been forced to recoup them on the acetone side.

This has been aided by low prices in the spot market for the other key phenol-acetone feedstock, refinery-grade propylene (RGP).

“Benzene is making things very expensive on the phenol side,” a producer said. “This will probably push acetone margins over RGP higher.”

Typically, acetone has been tracked by its margins over RGP, but acetone buyers said those margins are getting too high.

“I don’t see any thrust for acetone to move higher,” a buyer said. “It’s already well above RGP, more than normal.”

($1 = €0.82)

By: John Dietrich

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