China’s phenol import sentiment is murky, with deals concluded at a wide range after the country finalised its antidumping duties (ADDs) on material from five origins.
A South American-origin cargo of more than 2,500 tonnes for September-loading was done at $865/tonne CFR (cost & freight) CMP (China Main Port); while a 2,000-tonne cargo from the Middle East for October arrival was transacted at $960/tonne CFR CMP.
In the week ended 30 August, phenol prices were assessed at $900-940/tonne CFR CMP, down by $10/tonne week on week, according to ICIS data.
China’s demand for imports has remained poor after the yuan plunged against the US dollar following recent escalations in the China-US trade war.
Trades for domestic phenol were comparatively more robust, with consumption expected to get a boost with the start-up of two downstream plants this month.
Domestic prices in east China on 2 September were at Chinese yuan (CNY) 7,650/tonne ex-tank, higher by CNY50/tonne from 30 August.
Phenol consumption is projected to increase by up to 20,000 tonnes a month when the downstream cyclohexane and bisphenol A (BPA) plants start running at full capacity.
Jiangsu Weiming’s 150,000 tonne/year cyclohexane plant due to begin production in H1 September, and Shandong Lihuayi Weiyuan’s120,000 tonne/year new bisphenol A (BPA) unit, which will come on stream in mid-September.
Asia-based phenol sellers expressed their dismay at the availability of low-priced cargoes.
Some players deemed that the deal below $900/tonne CFR CMP was unrepeatable and should be considered as an opportunistic trade.
“Most players expected the phenol market to excel in H2 2019. Nobody expected deep-sea cargoes to become available at such low levels,” said a northeast Asia-based producer.
Two northeast Asia-based producers said that based on current feedstock and downstream prices, they would have to sell at close to $1,000/tonne CFR CMP in order not to incur losses.
Many phenol plants had undergone production cuts in order to minimise losses.
|India||Deepak Phenolics||RRunning at 60-70%|
|S Korea||LG Chem||Daesan plant’s production lowered to 90%|
|S Korea||Kumho P&B||No 3, 4 lines running at below 70%|
No 2 line shut three months from 1 July
|Taiwan||FCFC||Running below 85%|
|Taiwan||Changchun Plastics||Production cut to 90%|
|Taiwan||TPCC||Plans cut in September|
|Japan||Mitsui Chemicals||Osaka plant shut 27 June-31 July|
|Singapore||Mitsui Phenol Singapore (MPS)||Running at 80% in August|
|Thailand||PTT Thailand||Runs one line at 70% since 23 August|