27 February 2013 17:07 [Source: ICIS news]
HOUSTON (ICIS)--US February phenol contracts are expected to drop by 5.0% from January, sources said on Wednesday.
Most market sources are expecting February phenol contracts to shed 4.88 cents/lb ($108/tonne, €83/tonne).
The drop in phenol contracts matches the fall in February benzene, which shed 36 cents/gal.
This would put February phenol contract prices at 90.03-94.48 cents/lb on an FRT EQ (freight equalised) basis, as assessed by ICIS.
January contract prices were assessed at 94.91-99.36 cents/lb FRT EQ.
Buyers had been hoping that February phenol contracts would fall by an even 5 cents/lb but said that appeared unlikely.
“Right now, sellers are not being very aggressive with pricing,” a trader said. “They’re content to operate at low rates and protect their margins.”
Although phenol demand remains soft, producers have lowered their operating rates, keeping supply balanced.
The weakness in demand is expected to support softer margins on phenol over benzene, which fell by an average of 3 cents/lb in 2013 from 2012, sources said.
As a result, most market players expect that phenol contracts will follow benzene contracts in lockstep.
Major US phenol producers include Axiall, Dow Chemical, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.
($1 = €0.77)
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