Mar BPA likely delayed on expected firmer benzene

22 February 2008 18:23  [Source: ICIS news]

LONDON (ICIS news)--Bisphenol A (BPA) producers were reluctant to start March negotiations in earnest, expecting further gains in the upstream benzene market, market sources said on Friday.

The reluctance was triggered by the fact that European spot benzene values approached a record high earlier in the week, with both bids and offers for February loading above $1,210/tonne (€823/tonne) CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp).

BPA producers speculated that the higher benzene spot values would lead to a higher benzene contract settlement in March and were keen to track further developments. They said the benzene situation combined with successive price increases in January and February, which had not been passed on, could help support higher BPA prices in March.

Although freely negotiated BPA contract prices normally take into account feedstock costs one month in arrears, sellers said that further benzene price increases were likely to have some bearing on forthcoming discussions.

On top of feedstock pressure, good market fundamentals in Europe, combined with a strong Asian market and ongoing phenol tightness were other supporting factors for possible increases in March, said BPA manufacturers.

Initial March targets were between plus €20-50/tonne, said one producer, who said that the magnitude of the target increase would depend on the outcome of the March benzene settlement.

February BPA prices were agreed at €1,440-1,530/tonne FD (free delivered) NWE (Northwest Europe), down €20/tonne at the low end and a rollover at the upper end of the spread.

Buyers said they would resist any increases, despite higher feedstock costs in February, noting that downstream consumption was lower than expected in some cases. In addition, one customer said it would be difficult to pass on any increases in March noting that it would be a shorter month due to Easter holidays.

Competitively priced import material from Russia also provided buyers with additional bargaining power, although volumes were considered to be limited.

Russian import prices were quoted between €1,380-1,400/tonne FD NWE, at least €60/tonne lower than average European levels.

For more on BPA visit ICIS Chemical Intelligence

($1=€0.68)

ICIS Copyright © Reed Business Information 2009

Author: Heidi Finch
+44 20 8652 3214

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