01 May 2012 21:17 [Source: ICIS news]
HOUSTON (ICIS)--US cumene production in the first quarter was 32% higher year on year, reflecting concerns about a permanent plant shutdown and increased supply availability, sources said on Tuesday.
According to data released by the American Fuel & Petrochemical Manufacturers (AFPM), US 2012 first quarter cumene production was 923,524 tonnes, up from 700,872 tonnes for the first quarter of 2011.
Quarter on quarter, production increased by 23% from 753,551 tonnes for the fourth quarter of 2011.
The biggest reason for the improved production was the expected permanent shutdown of Sunoco’s 545,000 tonne/year Philadelphia cumene unit in Pennsylvania.
The company had planned to shut down the unit in July, but has recently extended the deadline to August.
This is because of talks with The Carlyle Group to form a joint venture to keep the refinery running, with Sunoco becoming a minority stakeholder in the operation.
However, for most of the first quarter, cumene producers looked to build some inventory ahead of expected supply tightness.
Also adding to higher production levels was a lack of plant turnarounds compared with a year ago, when several US plants were shut down for maintenance.
Year on year, US cumene inventories increased by 24% to 146,986 tonnes, up from 118,536 tonnes for the first quarter of 2011.
However, quarter-on-quarter inventories dropped by 8.9%, from 161,405 tonnes in Q4 2011, as feedstock benzene and refinery-grade propylene (RGP) prices surged, cutting into US cumene producers’ margins.
US April cumene prices are assessed by ICIS at 65-67 cents/lb ($1,433-1,477/tonne, €1,089-1,123/tonne) on an FOB (free on board) basis.
Blue Island Phenol, CITGO, Dow Chemical, Flint Hills Resources, Georgia Gulf, INEOS, Marathon and Shell Chemical contributed to the AFPM data.
($1 = €0.76)
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