24 January 2013 21:53 [Source: ICIS news]
HOUSTON (ICIS)--US January phenol contracts are expected to increase slightly as higher feedstock costs outweigh lower premiums, sources said on Thursday.
Sources expect US January phenol contracts to gain 3.12 cents/lb ($69/tonne, €52/tonne) on upstream benzene, but shed 3 cents/lb on weaker premiums.
This would put the ICIS assessed contract price up by 0.12 cent/lb to 94.91-99.36 cents/lb FRT EQ (freight equalised).
December contracts settled at 94.79-99.24 cents/lb on an FRT EQ basis.
Buyers and sellers said that 2013 contract premiums over benzene fell to 10-14 cents/lb from 2012 levels of 12-18 cents/lb.
The main reason for the fall was slightly weaker domestic demand and a steep drop in export demand.
Export demand is softer because US material is being based on higher benzene relative to other regions, and supply overseas has increased because of several plant start ups in Asia.
Feedstock US January benzene contract prices increased by 23 cents/gal, tracking tight supply and settling at a record high for the third month in a row.
In previous months, US phenol buyers have been able to use softer demand to deflect some of the monthly benzene change, but sources said it appeared unlikely to happen in January.
Major US phenol producers include Dow Chemical, Georgia Gulf, Haverhill Chemical, Honeywell, INEOS Phenol, SABIC Innovative Plastics and Shell Chemical.
($1 = €0.75)
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