07 December 2012 13:25 [Source: ICIS news]
LONDON (ICIS)--The European phenol contract price for December has increased by €52/tonne from November on the back of this month's December benzene contract settlement, producers and consumers said on Friday.
The contract settled on a pre-discounted basis at €1,648-1,688/tonne ($2,168-2,221/tonne) FD (free delivered) NWE (northwest Europe).
The increase of €52/tonne for key raw material benzene has come at a difficult time for the phenol market. Demand is already subdued for every phenol derivative and operating rates for both phenol producers and consumers are at a low level.
Production rates in Europe are estimated to be around 70-80% and producers will not be adjusting their output unless there is a significant increase in demand next year.
A maker of phenolic resins said: “My demand is already weak and I can’t see who is able to absorb an increase at this time of year.”
Another buyer for the bisphenol A (BPA) market, said it was “very worried” about its demand and was not convinced the business would improve by very much in January.
“I don’t see things changing sometime soon. January might not be a good month if feedstock prices firm again and from what I am hearing this might be the case,” he said.
In January 2012, the benzene contract price increased by nearly €200/tonne. However, benzene was some €219-224/tonne cheaper than it currently is.
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 Europe.
($1 = €0.77)
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