AFPM ’19: Phenol adder increases not long-term solution for acetone length

SAN ANTONIO (ICIS)–Phenol markets are “facing a structural change”, a source said on the sidelines of this year’s International Petrochemical Conference (IPC).

Phenol adders over benzene have risen as producers faced compressed margins due to oversupply of co-product acetone since mid-2018.

Raising phenol prices can be only a short-term fix and not a long-term solution to deal with acetone length, a phenol buyer said.

“They are testing the limit,” the buyer said regarding quarterly adder increases that have been implemented in Europe and the US. “We have reached a breaking point, and we have other options.”

Ultimately, the source said, demand deconstruction is likely for phenol derivatives.

“We can’t just say keep calm, and it will get better,” the source said regarding acetone’s impact on phenol.

Acetone oversupply continues in all regions, weighing on both producers and buyers.

Major US phenol producers are INEOS Phenol, Altivia, AdvanSix, Shell Chemicals, SABIC and Olin.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 24-26 March in San Antonio, Texas.