Europe phenol market seeks stability in price, demand

24 May 2013 17:10  [Source: ICIS news]

LONDON (ICIS)--The European phenol market is hoping for some feedstock price stability in June and an improvement in demand following price volatility in benzene and poor downstream sales, producers and consumers said on Friday.

“We are hoping in vain for some stability and I hope that it [the benzene contract price] hovers,” said a European phenol producer.

“Phenol is a bit worrying for now and there are no positive signs for the next months to come. Customers are saying things are getting worse and product is coming in from overseas. We are at low production rates,” said a second producer source.

Buyers of phenol say there is clearly no shortage of material on offer, even with European production standing at 70% and major producer INEOS Phenol being in a planned outage in Antwerp, Belgium.

In relation to phenol availability, a buyer said: “It [phenol availability] should be falling a bit from the supply side because of INEOS shutdown, but the market seems calm and relaxed.

“I would say there is a small cheering up in the market. What will be interesting is will it continue in June. May has been a better month - than expected.”

Another larger buyer consuming for the polymers market said volume-wise there was “good movement” but the situation was still “quite fragile” because of economic instability.

“Today, benzene in Europe is higher than Asia. I am talking with everybody and people are offering Asian and US phenol."

This week, European benzene spot prices were fairly range-bound in the second half of May. However, June is expected to see some price increases on benzene, owing to cracker shutdowns, limited pyrolysis gasoline (pygas) availability and turnarounds taking some production offline.

The market is expected to become more active leading up to the June contract settlement. May spot values were at $1,360-1,375/tonne (€1,047-1,059/tonne) CIF (cost, insurance, freight) ARA (Amsterdam-Rotterdam-Antwerp) on Friday afternoon, which is in euros is close to the €1,056/tonne May benzene contract price.

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: Julia Meehan
+44 20 8652 3214



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