08 October 2012 13:53 [Source: ICIS news]
BUDAPEST (ICIS)--Downstream demands for phenol is expected to fall further in the months ahead if the cost of key feedstock benzene fails to come down, buyers said late on Sunday.
Speaking on the sidelines of the 46th annual European Petrochemical Association (EPCA) meeting, phenol buyers said that the high price of benzene, and talk that phenol producers are seeking an increase in the ‘adder’ - also known as the fee over benzene for phenol - for next year will be a “disaster” for the market.
“An increase in benzene and the phenol fee for next year will be a disaster. The outlook for 2013 looks rather bleak and it’s trying to convince our customers to pay more which is the real problem for us,” the phenol buyer said.
“I don’t want a high price or a low price. I just want a price that I can work with,” the buyer added.
Another major buyer of phenol for nylon intermediates said the market situation was “simple”.
“Sometimes life is very simple. If you make a loss you will be out of business. Producers need to reduce their prices or we don’t buy,” the buyer said.
Downstream in the caprolactam market, demand was described as depressed.
One caprolactam sources said: “Caprolactam is depressed; we are running at a loss. The fact is the whole [phenol] value chain is suffering, polycarbonates and resins.”
Demand for polycarbarbonate, the main driver for the phenol production, has been suffering and operating rates are estimated to be around 65%, even lower in some instances.
Bucking the trend for phenol derivatives markets in September and into October is phenolic resins, although sources are not that upbeat about demand after October, even in this market,.
A phenolic resin producer said: “October is normally a good month for phenolic resins, but we will see demand come down in November and in December.”
“Our demand has been better than last year. The problem for us is not the volume but the price. It’s more quantity but less margin,” the producer added.
($1 = €0.77)
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