Europe phenol market tightness seen as temporary

17 April 2014 12:04 Source:ICIS News

LONDON (ICIS)--European phenol buyers and sellers on Thursday pointed to continued tightness of product for prompt delivery, but hoped that the situation would ease soon.

“There is plenty of phenol, but you need to order on time. One month ahead and you can have what you like. Problem is short notice,” said one buyer.

The buyer added high benzene costs were limiting the appetite through the chain for holding inventory.

“People are still hurting from higher benzene costsInventory levels are low - no one wants inventory exposure,” added the buyer.

The European shortness is caused by a number of factors including a small uptick in demand from European bisphenol A (BPA) and phenolic resins producers, US shutdowns causing global tightness and limited availability of raw materials cumene and propylene.

However these are all seen as short-term problems, with downstream Asian shutdowns an important factor behind the European demand increase, and raw material shortages already a bit better.

“Tightness is only a temporary situation. [It will be eased when the] US turnarounds are back onstream,” said the buyer.

“Cumene is a little better, propylene is still pretty tight,” said one producer.

“Increased phenol demand is temporary,” said a second producer.

By Rhian O'Connor