Price and market trends: US phenol, acetone face uptrend post Harvey

The US phenol and acetone spot markets are facing upward pressure on the back of loss production because of Hurricane Harvey.

US phenol spot prices were assessed on 1 September at an increase of 2-3 cent/lb, putting levels at 35-39 cents/lb on an FOB (free on board) basis for export material. Acetone prices held steady at 35-39 cents/lb on a CFR (cost and freight) Houston basis. The phenol increase was tied mostly to feedstock benzene values, which rose by 2.31 cents/lb in September.

Before Hurricane Harvey hit the US Gulf, phenol export deals were frequently being done at a discount of 2-4 cents/lb or parity to benzene. Sources expect that will stop on increased tightness domestically, stronger demand and better premiums on domestic deals.

One US phenol producer said it is selling domestic spot phenol at parity to contract levels, which are around 8-12 cents/lb above benzene on a DEL (delivered) basis.

Additionally, SABIC Innovative Plastics was experiencing production issues at its Mount Vernon plant in Indiana, unrelated to Hurricane Harvey.

Several phenolic resin producers said that market tightness from contract suppliers will be most felt in the second half of September, pushing them toward spot deals where possible.

Demand from Asia for US phenol was tied to lower prices, rather than consumption, and will likely pull less on the US market.

On the acetone side, upstream refinery-grade propylene (RGP) values are increasing, but trading is thin, so there is no clear picture on where values will end up by mid-September.

Inquiries for imported Asian product have increased, sources said, but no firm price ideas were available.

Demand for imports could be curtailed as several large downstream methyl methacrylate (MMA) plants are down in September or October.