The July benzene contract increased by 80 cents/gal early this month on downstream demand and tight supply, sources said.
The phenol increase took the July contract to a range of 90.47-94.92 cents/lb, as assessed by ICIS.
Also contributing to the phenol push was upstream refinery-grade propylene (RGP), which has strengthened throughout the month.
While phenol prices are escalating, which is cause for concern among both buyers and sellers, there is growing talk that operating rates are moving to 80% and possibly higher - still inefficient, but improved over the more middling rates of 60-70% heard throughout much of the past 12 to 18 months.
Sources describe phenol market demand as flat to somewhat stronger year over year, but say benzene price pressure remains a major concern, pressuring derivatives and producers’ margins.
In downstream markets, a measure of future US construction activity increased in June for the fourth consecutive month, the last two of which have indicated growth in architectural design services, the American Institute of Architects (AIA) said this week.
The AIA’s Architectural Billings Index (ABI) increased to 53.5 for June, up from 52.6 in May. The index is derived from a monthly survey of AIA-member firms, and reflects a lag of nine to12 months between architecture billings and construction spending.
Major US phenol producers include Axiall, Dow Chemical, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.