Europe April phenol contract down €62/tonne with benzene

05 April 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--The European April phenol contract price has moved down by €62/tonne in line with the same price decrease of major feedstock benzene, sources confirmed on Friday.

The April pre-discounted phenol contract price settled at €1,556-1,596/tonne ($2,007-2,059/tonne) FD (free delivered) NWE (northwest Europe).

The April European benzene contract settled at €992/tonne FD NWE.

Said one phenol buyer: “The decrease is very much welcomed in the industry, but the drop is insufficient to make the industry feel comfortable again.”

Q1 demand for phenol has been relatively stagnant, and no major shift in the supply and demand dynamic of the market is expected in the coming months.

Because of this, operating rates in Europe have been keeping at a lower level, with estimates of about 70-80%.

“Production will remain low in the second quarter because there are no indications that demand is going to get much better,” said a phenol supplier.

A second seller of phenol described its demand as “very bad”.

However, sources say volumes are moving, albeit at low levels and consumers are keeping orders to a minimum.

“Demand is weak but I think the closure of Antwerp might mix the market up a little bit,” the producer added. “But there is nothing moving in the spot market, and with China selling spot phenol at $100/tonne above the [Asian] benzene price, this is really difficult for some of my customers. Chinese producers can sell for $600 lower than they can here.”

A second producer said there really was nothing new to say about the phenol market.

“People are just waiting,” he said.

Buyers said there was no shortage of phenol available, and some were even struggling to honour their contractual commitments.

The phenol contract in Europe is largely linked to feedstock benzene price movements, although a quarterly fee, also known as the adder, can be an influencing factor for some producers and consumers in Europe. Annual fees are also in place at many accounts.

($1 = €0.77)

By: Jane Gibson
+44 20 8652 3214

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