US April cumene prices assessed at rollover on feedstocks

06 April 2012 16:48  [Source: ICIS news]

The biggest concern for the US phenol-acetone market in 2012 is the possible shutdown of Sunoco’s cumene unit in Philadelphia, PennsylvaniaHOUSTON (ICIS)--US April cumene contract prices were assessed at a rollover on Friday, tracking higher and lower feedstock costs.

US April cumene prices were assessed by ICIS at 65-67 cents/lb ($1,433-1,477/tonne, €1,103-1,137/tonne) FOB, flat with March prices.

Sources said the cumene market continues to be mostly driven by feedstock benzene and refinery-grade propylene (RGP) prices.

April benzene contract prices fell by 11 cents/gal, but spot RGP prices for April have moved higher by 2.25-3.00 cent/lb.

“When we looked at the feedstock changes for April, our numbers were almost exactly the same,” a cumene buyer said.

Sources said cumene demand was stable in March and likely to remain consistent for the coming months because of lower-than-normal operating rates at downstream phenol-acetone plants.

“Phenol producers don’t have room to crank up their operating rates until Asian demand comes back,” a phenol buyer said. “They certainly can’t increase the rates just to make more acetone.”

Cumene supply is snug, but could tighten considerably after the expected shutdown of Sunoco’s 545,000 tonne/year Philadelphia cumene unit in Pennsylvania in June.

Sources said supply would be tight, but not constrained, as most phenol buyers have made plans to deal with the loss of production.

However, that added tightness, combined with a possible increase in demand if operating rates increase to service the Asian market, is likely to push cumene higher.

One producer said it thinks that those factors could push other producers to raise their premium over cumene feedstock costs to 3-4 cents/lb, rather than the 2-3 cent/lb range most are using now.

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

($1 = €0.77)

By: John Dietrich

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