European phenol operating rates stay low on poor demand

26 July 2013 16:57  [Source: ICIS news]

LONDON (ICIS)--European demand for phenol will stay at a low level during August, and a post summer pick-up in demand is not expected, sources in the phenol market said on Friday.

In relation to its phenol demand, a major buyer said: “I am afraid there is not much happening, and there is nothing coming out of the market that is positive.

“I know it’s the holiday month, but it’s depressing,” it added.

Another buyer consuming phenol for the phenolic resin market said: “For phenol it is just cut and paste every month. There really is little to say. Our demand is steady, but it’s on a low level and benzene is still high.”

The July benzene contract price settled at €978/tonne ($1,340/tonne) FOB (free on board) NWE (northwest Europe).

Sources in the phenol market are predicting a decrease in the August benzene contract price, which is due to settle on 31 July.

“I think benzene will come down by €30/tonne, this what I have told our guys, but it’s still high,” said another phenol buyer.

Meanwhile, phenol producers confirm that the market situation is unchanged.

“There is no story on phenol this week we are just trying to survive,” said a major producer.

It is now just over a year since phenol operating rates started to be trimmed back because of falling demand in the key derivative bisphenol a (BPA) market. This coincided with a sharp drop in export opportunities to China – a market that is now relatively self-sufficient for phenol and many phenol derivatives.

Looking beyond August, a large buyer for the nylon intermediates market had hoped that September would see demand improve, but has become less hopeful.

“There’s no big news. September looks a bit weaker than expected and people are changing their attitude. Some people are working just-in-time," the buyer said.

“We are not at the level we had hoped,” he added.

($1 = €0.75)

By: Julia Meehan
+44 20 8652 3214

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