The phenol decrease took the April contract to a new range of 83.95-88.40 cents/lb as assessed by ICIS. The April benzene contract previously fell by 15 cents/gal, settling at $4.80/gal from $4.95/gal in March. That decline followed a March decrease of 14 cents/gal from February’s benzene contract.
Some sources suggested that higher phenol production rates ahead of spring turnarounds and on lower March and April benzene contract costs lengthened supply of phenol and co-product acetone and heightened inquiries from buyers. But phenol suppliers were said to be preserving as much as possible to supply customers during outages in late April and throughout May.
After the turnarounds, however, phenol production rates are expected to return to average rates of 60-70%, unless strong pent-up demand for phenol resins used in housing and other construction surfaces soon.
However, US homebuilders remained largely uncertain about the nation’s housing sector in April, a key survey recently indicated. Builders cited concerns about ongoing tight credit conditions that hamper both contractors and potential home buyers.
In its monthly survey of housing contractors, the National Association of Home Builders (NAHB) said its housing market index (HMI) for April inched up to 47 from the downwardly revised 46 reading for March, but repeated for the third straight month a story of low expectations among builders.
Major US phenol producers include Axiall, Dow Chemical, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.