02 November 2012 16:56 [Source: ICIS news]
HOUSTON (ICIS)--The US October phenol contract increased by 3.1%, sources confirmed on Friday, matching the change in feedstock benzene.
US October phenol contracts increased by 2.71 cents/lb ($60/tonne, €46/tonne), matching the jump of 20 cents/gal in the October benzene contract.
“We settled all of our contracts at the benzene change,” a phenol producer said. “There was very little pushback.”
This put the October phenol contract at 87.60-92.05 cents/lb FRT EQ (freight equalised) as assessed by ICIS, up from September’s level of 84.89-89.34 cents/lb FRT EQ.
Some buyers said that demand has been steady for this time of year, allowing them to pass along the higher-priced phenol.
Others have said that their customers are threatening to switch to different chemicals if prices continue to rise.
“If our customers make the switch, they aren’t coming back,” a buyer said.
Several market players were concerned heading into November, as the US benzene contract settled at a record high.
“Everyone is going to have to make decisions about how much high-priced phenol they want to hold to in their inventory,” another buyer said.
With benzene at record highs, sources said some phenol producers have sold off their excess material rather than use it to make more phenol.
“We can’t tell customers we won’t make product,” the producer said. “But selling your excess benzene at record highs makes a lot of sense.”
Major phenol producers include Dow Chemical, Georgia Gulf, Haverhill Chemical, Honeywell, INEOS Phenol, SABIC Innovative Plastics and Shell Chemical.
($1 = €0.77)
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