02 November 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--The European phenol contract for November has increased by €34/tonne, in line with the rise in the benzene settlement, customers and producers said on Friday.
The contract settled on a pre-discounted basis at €1,596-1,636/tonne ($2,073-2,125/tonne) FD (free delivered) NWE (northwest ?xml:namespace>
"I don’t think it was unexpected," a phenol buyer said. "I do believe the market would have gained a lot from a decrease. This will have an impact on demand. European phenol is just becoming too expensive."
The phenol contract in Europe is largely linked to feedstock benzene price movements, although a quarterly fee, also known as the adder, is also an influencing factor for some producers and consumers in
Those players involved in negotiating the quarterly adder have mostly seen a rollover from the third quarter to the fourth.
The European benzene contract price for November rose to €1,032/tonne, up €34/tonne from the previous month. The settlement was made at a US dollar concept of $1,338/tonne FOB (free on board) NWE and converted to the euro price at the agreed exchange rate of €1:$1.2965.
Phenol purchasers said that it would be difficult for their customers to pass on hikes all the way down the chain due to the current economic situation.
Phenol production rates remain reduced on the market, at around 70% on average according to market sources. Rates are expected to remain low until January at least.
($1 = €0.77)
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