Contract Market
US July formula-based phenol contracts were assessed lower by 6% from June during the week ended 29 July.
Formula-based prices fell by 5.02 cents/lb ($111/tonne, €77/tonne), as most contracts were settled, sources said.
Freely negotiated contracts remain largely unsettled, and negotiations are continuing.
Sources were divided regarding the level of premium freely negotiated contracts will carry for July.
Producers argued that phenol demand is still strong domestically, mostly from the epoxy resins market, and that Asian demand is bouncing back.
As a result, some nominations were heard for a drop of 3 cents/lb for July contracts.
Buyers said that, with polycarbonate (PC) and phenolic resins demand starting to soften, freely negotiated contract prices should fall by 5 cents/lb or by the full amount of formula-based contracts.
Phenol supply is snug, sources said, with production at high rates and shipments of spot material into Asia still pulling in strong margins and soaking up leftover material.
As a result, spot material in the US remains limited, but domestic demand for it is muted.
Supply could start to tighten if production issues in Europe force some US material to be shipped overseas, but sources said this was unlikely to have much of an effect on the US market.
Overseas Markets
Asian phenol spot prices continue to rebound, moving higher for the third week in a row, by $70-100/tonne. The biggest reason for the increasing prices are higher feedstock costs and limited availability of material.
In Europe, spot phenol prices were up by $100/tonne on higher feedstock costs and supply tightness due to production issues.
Feedstocks
The US August benzene contract price reached a confirmed settlement at an increase of 44 cents/gal on stronger spot benzene prices and lower production rates. The increase is the first for the contract price since May 2011.
US spot prices for refinery-grade propylene (RGP) moved higher by 2.5 cents/lb, although deals done were at higher prices for smaller parcels, and thus were deemed not representative of the market.
($1 = €0.70)
This week on ICIS ( www.icis.com ):
29/07/2011 19:01 US July formula-based phenol contracts fall 6% on weaker benzene
29/07/2011 17:57 US August benzene contract rises for first time since May
29/07/2011 17:43 Petrochemicals producers, refiners wary over second half
28/07/2011 17:46 US pending home sales rise for second straight month in June
28/07/2011 15:41 INSIGHT: Default lies not in our stars but in ourselves
