01 April 2013 20:41 [Source: ICIS news]
HOUSTON (ICIS)--US phenol contract prices fell for March, in line with a drop in March benzene contracts, sources confirmed on Monday.
Phenol pricing dropped by 1.49 cents/lb ($33/tonne, €26/tonne), taking the new contract range to 88.54-92.99 cents/lb, as assessed by ICIS.
US benzene trade sources said April benzene is already at a premium, with spot levels about 5-15 cents/gal above March prices last week.
US spot benzene prices fell by 1-8 cents/gal in the past week, amid downward pressure from price declines in Europe and Asia and improved availability during March.
Sources said that among freely negotiated phenol contracts, there was no discount above the benzene change, as margins remained thin amid tight supply stemming from low operating rates.
In other upstream news, US refinery-grade propylene (RGP) prices were flat late on Friday at 56.25-56.50 from a week earlier on a lack of trades during the week, but they could move higher to start April on a slight rebound in spot polymer-grade propylene (PGP) values.
Although phenol production has fallen off, buyers said they expect it to pick up again in the near term because higher operating rates will be prompted by expected demand improvement from the US construction industry.
But improvement has yet to surface, and most market participants described the phenol market as “grim” during a recent industry conference.
Additionally, the market is struggling because of long supply in Asia, sources said.
Spot phenol is still stable but is expected to weaken on soft demand and cheaper benzene.
A Latin American producer recently said phenol exports have nearly vanished because of weak margins. The seller added that the Latin American phenol derivatives market is facing intense pressure from overseas sellers, mostly in Asia.
Spot phenol prices in China and India continued steady but are still facing downward pressure because of ample supply, stemming partly from reduced buying interest.
Major US phenol-acetone producers include Axiall, Dow Chemical, Haverhill Chemical, Honeywell, INEOS Phenol, SABIC Innovative Plastics and Shell Chemical.
($1 = €0.78)
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