Online news for Borealis - Powered by ICIS news
  

Feedstock, Olefins and Aromatics

Europe May phenol contract follows benzene up €64/tonne

ICIS News : 3-May-13 23:59


LONDON  (ICIS)--The European May phenol contract price has moved up by €64/tonne ($83/tonne) in line with the same price increase of major feedstock benzene, sources said on Friday.

The contract settled on a pre-discounted basis at €1,620-1,660/tonne FD (free delivered) NWE (northwest Europe).

The May benzene contract price was agreed at €1,056/tonne FD NWE.

The benzene increase was described as a disaster by a number of buyers of phenol, who say they are suffering from low margins and tough competition from China.

A major buyer of phenol for the production of bisphenol A (BPA) for polycarbonate production (PC) said: “The increase does not help demand to become better and I wish I had some better news, but the benzene increase is a disaster. In Asia, prices are so low and business does not want to pick up.”

“There are no signs that business is getting better for any region. It’s not looking good – this is the time of year when we are busy,” the phenol buyer added.

Regarding the impact that the DSM force majeure 
on phenol and caprolactam at Geleen in the Netherlands might have on the phenol and acetone markets, the buyer said: “For phenol and acetone there are no problems - I don't expect any problems because won't have big demand.” 

For every tonne of phenol produced, 0.62 tonnes of acetone are made.

About the May benzene increase, a second major buyer of phenol for PC production said: “About the impact of the benzene increase – it’s very bad as you can imagine. Demand is stable at a low level, but prices are terrible.”

The buyer described its stock position as “covered”.

On the selling side, a producer of phenol described business as “good” but sentiment as “bad”.

“Phenol there are no changes, it’s very stable. The benzene increase will go straight onto phenol. I have some customers crying because of Chinese competition. Customers are always moaning,” the producer said.

The phenol spot market in Europe is virtually non-existent because buyers are more than covered with contractual volumes.
Lower prices in Asia also make is impossible for European exporters to move volume to the key China market.

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 = €0.77)



By Julia Meehan
+44 20 8652 3214
icisnews.europe@icis.com

 
Additional Information