04 October 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--The European October phenol contract price has fallen by €51/tonne ($70/tonne), mirroring the same decrease in the value of major feedstock benzene, sources confirmed on Friday.
The October phenol contract price settled on a pre-discounted basis at €1,490-1,530/tonne FD (free delivered) NWE (northwest Europe).
The European October benzene contract was agreed at €926/tonne FOB (free on board) NWE.
“A decrease in benzene is better than an increase, but it still does nothing for demand,” said a phenol buyer.
“Benzene is the same price everywhere which is a help, particularly in Asia, but still we are under pressure because demand is low for resins and Asia is still competitive,” commented another phenol buyer.
Although buyers sounded even more downbeat about demand compared with previous months, one producer described the market situation as unchanged since the summer months.
“I’ve not seen any major changes. I would agree it’s not getting better, but it's not getting any worse. Our volumes are relatively steady,” the producer said.
Another producer however was less positive.
“Our rates are down - even further down than previous months - nobody is convincing us when it [demand] will improve.”
The phenol producer said that while it understands the difficult position its customers are in, in terms of demand and margins, it too needs help.
“Not only phenol – all our products – everybody is trying to bring down prices – we understand customers are in the same situation, but we also need help,” the producer said.
Phenol operating rates have been reduced since July 2012 because of a lack of phenol exports to Asia, weak macro economic conditions and falling demand for major phenol derivative BPA.
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 = €0.73)
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