01 March 2013 20:43 [Source: ICIS news]
HOUSTON (ICIS)--US February phenol contracts fell in-line with February benzene contracts, sources confirmed on Friday.
Buyers and sellers said US February phenol contracts shed 4.88 cents/lb ($108/tonne, €83/tonne) from January settlements, matching the February benzene contract fall of 36 cents/gal.
“Every producer refused to come down by more than the benzene change,” a buyer said. “Prices are still too high in the scheme of things.”
The fall in February phenol puts contracts at 90.03-94.48 cents/lb on an FRT EQ (freight equalised) basis, as assessed by ICIS.
January contracts were assessed by ICIS at 94.91-99.36 cents/lb FRT EQ.
Producers said that buyers were able to recoup margins at the start of the year, when premiums over feedstock benzene fell by an average of 3 cents/lb year on year.
Premiums fell because demand has weakened in the domestic market and plunged in the export market.
Sources said producers are being offered premiums of 3-5 cents/lb on export phenol, which has pushed them to curb operating rates to keep supply balanced with demand.
Domestic buyers said prices are creating demand destruction, especially in the phenolic resins market.
Major US phenol producers include Axial, Dow Chemical, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.
($1 = €0.77)
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