US February cumene contract rises 31% on higher feedstocks

09 February 2012 20:28  [Source: ICIS news]

HOUSTON (ICIS)--US February cumene contract prices were settled at a 31% increase because of higher feedstock costs and stable demand, sources said on Thursday.

The US February cumene contract price was assessed by ICIS at 63–65 cents/lb ($1,389–1,433/tonne, €1,042–1,075/tonne) FOB (free on board), up from January’s assessment of 48–50 cents/lb FOB.

Buyers and sellers confirmed the price, but added that some contracts will continue moving throughout the month, tracking prices for feedstocks refinery-grade propylene (RGP) and benzene.

Benzene prices rose by 50 cents/gal in February in the contract market, and spot prices are trading close to contract value.

Spot RGP prices started February between 63–64 cents/lb, up by 19.5 cents/lb from the start of January, as assessed by ICIS.

A cumene producer said the feedstock costs need to be passed down to phenol-acetone producers, and that demand levels are solid enough to absorb higher costs.

However, demand for cumene is expected to continue falling as phenol-acetone producers run their plants at lower rates because of weak export demand, particularly from Asia.

Cumene prices are also expected to move higher on tighter supply if Sunoco’s 545,000 tonne/year Philadelphia cumene unit in Pennsylvania is shut down in July, as most market players expect. Sunoco is planning on closing the plant unless it is sold in an effort to exit manufacturing.

Major US cumene producers include CITGO, Flint Hills Resources, Georgia Gulf, Marathon, Shell Chemical and Sunoco.

($1 = €0.75)

By: John Dietrich
713-525-2600

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