02 August 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--The European August phenol contract price has decreased by €32/tonne ($42/tonne) following the same decrease in the value of major feedstock benzene, sources confirm on Friday.
The contract settled on a pre-discounted basis at €1,510-1,550/tonne FD (free delivered) NWE (northwest Europe).
The upstream July benzene contract price settled at €946/tonne.
While another reduction in cost of benzene is a relief for the market, demand remains very low.
One producer said its demand felt even lower this week, adding that it thought many of its customers had high stocks of phenol in tank.
“Phenol demand is low, so that's a threat because I think everybody has really high stocks. All [named consumer's] Vopak tanks are full and it’s the same for others,” the producer said.
However, reports of high stock were dismissed by a major buyer as “crazy”.
“I don't have high stocks - why should I? It would be crazy," it said.
“Nobody has stocks in a situation where benzene is falling. It’s a terrible year for the industry. It’s not just us. Phenol producers are struggling with low margins and there are no exports anymore from the US to Asia so it’s difficult for them,” the buyer added.
Phenol operating rates have been reduced for over on year now because of a lack of phenol exports to Asia, weak macro economic conditions and falling demand for major phenol derivative bisphenol A (BPA).
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