Europe May benzene contract increase a 'disaster' for phenol

03 May 2013 09:46  [Source: ICIS news]

LONDON  (ICIS)--The European May benzene contract price, which settled at an increase of €64/tonne ($83/tonne), is a disaster for the phenol derivative market, phenol sources said on Friday.

A major buyer of phenol for the production of bisphenol A (BPA) for polycarbonate production (PC) said: “The increase does not help demand to become better and I wish I had some better news, but the benzene increase is a disaster. In Asia, prices are so low and business does not want to pick up.”

“There are no signs that business is getting better for any region. It’s not looking good – this is the time of year when we are busy,” the phenol buyer added.

Regarding the impact that the DSM force majeure on phenol and caprolactam at Geleen in the Netherlands might have on the phenol and acetone markets, the buyer said: “For phenol and acetone there are no problems - I don't expect any problems because won't have big demand.”

For every tonne of phenol produced, 0.62 tonnes of acetone are made.

About the May benzene increase, a second major buyer of phenol for PC production said: “About the impact of the benzene increase – it’s very bad as you can imagine. Demand is stable at a low level, but prices are terrible.”

The buyer described its stock position as “covered”.

On the selling side, a producer of phenol described business as “good” but sentiment as “bad”.

“Phenol there are no changes, it’s very stable. The benzene increase will go straight onto phenol. I have some customers crying because of Chinese competition. Customers are always moaning,” the producer said.

Demand for phenol has been declining since July 2012 and phenol producers have reduced operating rates as a result.

he May benzene contract was agreed at €1,056/tonne FOB (free on board) NWE (northwest Europe).

($1 = €0.77)

By: Julia Meehan
+44 20 8652 3214

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