21 December 2012 19:59 [Source: ICIS news]
HOUSTON (ICIS)--US December phenol contracts moved up slightly higher, tracking a gain in feedstock benzene, sources said on Friday.
US December phenol contracts were assessed higher by 0.4 cents/lb ($9/tonne, €7/tonne), matching a 3 cent/gal increase in December benzene.
This puts ICIS-assessed December phenol contracts at 94.79-99.24 cents/lb FRT EQ (freight equalised), up from the November settlement of 94.49-98.84 cents/lb.
Some buyers reported receiving a rollover, while others said their formula-based contracts matched the benzene change exactly.
“In my mind, I would roll it over,” a buyer said. “Sock it to us next month; it’s not as though benzene is going down next month.”
A producer said it continues to be worried about what benzene costs will do to the market in 2013.
“Phenol producers are losing business,” a producer said. “Prices are too high, but there’s nothing we can do about it.”
Buyers and sellers agreed that premiums on domestic phenol over feedstock costs have fallen year on year.
Sources said 2013 premiums are mostly being done in the 10-14 cents/lb range, down from the 2012 range of 12-18 cents/lb.
Weakness in the export market, as well as the continually high benzene costs, were the main factors driving down premiums.
“We’re hearing everyone say that next year will be like this year,” a phenol buyer said. “We think it will be even worse.”
Major US phenol producers include Dow Chemical, Georgia Gulf, Haverhill Chemical, Honeywell, INEOS Phenol, SABIC Innovative Plastics and Shell Chemical.
($1 = €0.76)
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