MELBOURNE (ICIS)--The rupee-denominated domestic phenol prices in India drew strength from the gains in crude oil and benzene and edged higher for a second week, market participants said on Tuesday.
The prices firmed to Indian rupees (Rs) 63-64/kg ex-tank on 5 December from the 2 December close of Rs61-63/kg ex-tank, the participants said.
The prices are in their second week of modest rebound, after bottoming out at Rs61-62/kg ex-tank on 25 November following seven consecutive weeks of decline, according to data compiled by ICIS.
According to several market participants, the domestic phenol market recovery has less to do with any material improvement in demand and is largely driven by the OPEC-induced crude oil market rally and robust benzene prices in Asia.
Benzene prices were at $800-815/tonne FOB (free on board) Korea as at noon on 6 December, according to ICIS data.
“The [Kandla phenol] price increase is due to crude and benzene. I don’t see any other reason,” an importer said.
“Demand has not improved,” a supplier said.
Onshore phenol inventories at Kandla were estimated by market sources at roughly 33,500 tonnes on 2 December, unchanged week on week. Stockpiles are also being constantly topped up by a steady inflow of shipments.
The chemical tanker Ginga Panther arrived at Kandla on 5 December with 900 tonnes of fresh supplies, after the vessel Saehan Estrella discharged close to 4,000 tonnes of phenol a week ago, the importer said.
The India phenol market has been mired in an overabundance of existing supply and weak domestic liquidity. Trades on the domestic front have been in a state of disarray since the government’s surprise 9 November demonetisation move.
Top photo: Plywood. Phenol is used to produce phenolic resins which in turn are used for making exterior plywood. (Photographer: Hartmut Schmidt/imageBROKER/REX/Shutterstock)