European acetone revenue increase drives industry phenol planning next year

In recent days, the huge gap between the cost of upstream raw propylene and the spot price of Acetone in Europe (not far from the three-year low set in May) has narrowed significantly, London reported on September 2. In an unpleasant year, phenol / acetone producers can get some welcome relief, as they describe the 2020 plan. Although the September European propylene contract price assessed on Friday dropped by 50 euros to 860 euros / ton on the basis of the delivery price at the destination in the northwest of Western Europe (nwe), the spot price of acetone only dropped steadily by 20-30 euros / ton to 440-500 euros / ton. Since the end of 2017, the price of propylene has been higher than the spot price of acetone. Now, the price of acetone is about half of the price of propylene, which forces European producers to subsidize acetone by selling the by-product phenol. This initiative is considered by the industry to be complex and unsustainable, and the profit margins of both products are seeking to improve over a period of time. Due to the shortage of spot demand and supply this year, the sales of phenol in Europe are mostly in the form of contracts, which limits the flexibility of producers to rebalance the market through price adjustment. At the same time, the contract shall be adjusted monthly according to the change of the contract price of raw benzene, and the surcharge shall be adjusted quarterly. The next round of negotiations on contract surcharges will begin this week, and the industry will also start the planning phase in 2020, with profitability expected to play a role in these discussions. "[low] acetone margins and [high] benzene prices have been digested throughout the year," said one producer. This refers to negotiations in the fourth quarter and the approaching period of 2020 plan, and we will not look for the difference in the fourth quarter. " This year's weak demand, especially due to the poor performance of the automobile industry, which is the main beneficiary of the downstream products of phenol and acetone, bisphenol A (BPA) and Methyl Methacrylate (MMA), has been affected by manufacturers' efforts to raise prices and increase profits.