Asian phenol prices gained $145/mt or 11.3% in July to $1,425/mt CFR China, according to Platts data.
Market sources said that rising feedstock costs were the main reason for the increase in phenol prices as demand continues to be sluggish and producers of downstream derivatives such as bisphenol-A continue to face losses.
In July, feedstock benzene gained $85.50/mt or 7.9% to $1,157/mt FOB Korea Tuesday on the back of an open arbitrage to the US and firmer crude oil prices.
"Buyers had the mentality that if I don't buy today, I won't be able to get it as cheap tomorrow if upstream prices trend higher," a Chinese trader said Tuesday.
In July, Sinopec Gaoqiao Shanghai and Yanshan Beijing raised phenol prices by Yuan 500/mt to Yuan 11,000/mt, or $1,408/mt on import parity basis.
However, sources said that the uptrend in phenol prices will be limited as downstream BPA producers are facing losses.
BPA prices were heard unchanged week on week Tuesday at around $1,600/mt CFR. BPA producers typically require prices to be $300/mt higher than phenol to break even.
"I don't think phenol prices can rise further as downstream BPA producers are suffering from losses," a Japanese producer said Tuesday.
"There is an oversupply of BPA, that's why prices are not rebounding," the producer added.
Market sources also added that phenol price are likely to stay supported at currently levels in view of tighter supply in August due to scheduled turnarounds at four producers -- Sinopec Shanghai Gaoqiao, Sinopec Sabic Tianjin, Bluestar Harbin and Formosa Chemicals & Fibre Corporation.
