Short supply soars Phenol price; traders avoid spot purchase to maintain margins – 28 Sep 2014

Phenol prices advanced to a new high of Rs. 137.50 per Kg in the intial trading hours on 29th September, 2014. This is the third consecutive appreciation in Phenol prices this month. Two weeks ago, the prices were keeping within the trading level of Rs. 130 per kg. Shortage of material has kept the prices on the higher side since the beginning of this month.

Herdilia, which is the sole producer of Phenol in India, has been keeping a close watch at the market, a company source informed Indianpetrochem. The source further added that Herdilia may not take any fresh booking before 7th Oct, 2014.

Last week, market sources indicated Indianpetrochem about a shipment coming at the Indian ports but as the material was pre booked, it could not inflict the soaring demand of about 24000 metric tonnes. However, HOCL manufacturing unit is expected to resume its production by 1st Oct, 2014 thereafter will supply material from 5th of October.

On the other hand, Kandla port is running out of stock with just 1000 metric tonne of material available at the port. Over and above, in the international market prices of Phenol have been on the higher side. Importers were reportedly avoiding any spot purchase as the material would cost about $200-$250 more on spot buying. The Booking price was moving in the trading range of $ 1650- $1700 per tonne, on FOB Korea basis, which is about $40-$50 up from the previous quote.

Overall, Prices are expected to remain on the higher side for a month or so as the traders are not expecting any big shipment soon and are quite apprehensive about the current market scenario. Market may only retrieve after the end of the festive season.