CFR China phenol has gone above the breakeven level for the first time in nearly five months, mainly on the back of a sharp drop in feedstock benzene prices. 

Phenol was assessed at $875/mt on a CFR China basis Tuesday, down $5/mt from the previous week, while benzene tumbled $88.50/mt on the week to be assessed at $622.50/mt. 

CFR China phenol was last above its breakeven level on March 31, with its spread to FOB Korea benzene at $255/mt, Platts data showed. 

The breakeven price for producing phenol is typically $250/mt above benchmark FOB Korea benzene assessments. 

The widening spread between phenol and benzene prices was due mainly to a sharp fall in the feedstock price, rather than any recovery in the phenol market. 

Fundamentals in the phenol market are still weak, on thin demand from downstream products such as bisphenol A and caprolactam, as well as ample phenol production in China, an end-user in Northeast Asia said. 

But benzene has fallen even more sharply over the week, led mainly by the fall in the US benzene market, as well as weak upstream market.