01 November 2013 12:15 [Source: ICIS news]
LONDON (ICIS)--The European November phenol contract price has fallen by €78/tonne ($105/tonne) following the same decrease in the value of major feedstock, benzene, sources said on Friday.
The contract settled on a pre-discounted basis at €1,412-1,452/tonne FD (free delivered) NWE (northwest Europe).
The initial European November benzene contract was agreed at €848/tonne FOB (free on board) NWE.
In relation to what the settlement means for phenol demand, a major producer said: “The lower price will stimulate demand. We know in the second half of November business will be down, but for the moment we see people are ordering more.
“Volume-wise its not that bad - margin-wise it is still as bad as it was."
A second phenol producer said it was “moving regular” volumes of phenol.
Phenol operating rates have been reduced since July 2012 because of a lack of phenol exports to Asia, weak macroeconomic conditions and poor demand for major derivative bisphenol A (BPA).
Phenol operating rates in Europe are estimated to be running at circa 60-70%.
The phenol contract in Europe is largely linked to feedstock benzene price movements, although a quarterly fee, also known as the adder, is also an influencing factor for some producers and consumers in Europe.
($1 = €0.74)
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