Further, traders say there is short supply of phenol in the domestic market which collectively has contributed to the phenol prices moving up.

Hindustan Organic chemicals, Herdillia Chemicals, Neyvelli Liquids are among the main producers of phenol. On Thursday August 31, phenol was quoted between at Rs 44-45 (basic) per kg, up from Rs 35 per kg quoted in April.

Rising demand for phenol too has contributed to the price rise, traders feel, Phenol's higher prices may be for short period and it is solely depend on crude oil price movements. Currently, crude price are quoted at around $32 per barrel, highest in last 10 years. However, imported phenol, available at a marginally higher prices of Rs 1-2 per kg, which local traders say are kept to maintain clients. Domestic manufacturers sell phenol at around between Rs 44-46 per kg, while the imported phenol is available at around Rs 45-47 per kg.

Domestic demand of phenol is said to be growing at nine per cent per annum.On the the international front, cumene was quoted between at $620 per mt, up from $515 per mt quoted in April 2000. Since it is mostly imported and not manufactured in India, cumene remains in short supply. In the international front large capacity of plant has been started during this year.

It is estimated that, price should go down, but again it is depend on crude prices. India's annual phenol manufacturing capacity is around 75,000 mt pa against the overall demand is around 90,500 mt pa. Among the various application of phenol is mainly used in rubber chemicals, biocide, paints, adipic acide, bisphenol-A, epoxy resins, phenolic resins, alkyl phenols, 24D (agro chemicals) selective solvents, phenolphthalein pharma and others. The most common technology for manufacture of phenol is the cumene process where cumene is oxidised to yield phenol and by-product acetone. Phenol prices may remain high depending upon on its supply, crude price and Indian rupee position against dollar.