08 May 2012 16:34 [Source: ICIS news]
May contacts are expected to fall by as much as 3 cents/lb.
Spot prices for cumene feedstock refinery-grade propylene (RGP) have fallen by 10.0-12.5 cents/lb in the past month.
This is expected to outweigh the 9 cent/gal increase in cumene feedstock May benzene contract prices.
Premiums on cumene over feedstock costs are expected to remain stable because supply/demand balances are not expected to change.
However, operating rates at downstream plants are subdued because of steady domestic demand for phenol and acetone and a weak export market.
Cumene supply is outpacing demand, but cheaper cumene could push phenol-acetone buyers to build some inventory, especially if cumene capacity is lost in August.
US Sunoco said it has pushed back its deadline for the permanent shutdown of its Philadelphia refinery in Pennsylvania to August because the company is in talks with The Carlyle Group to form a join venture to run the refinery.
The refinery has a 545,000 tonne/year cumene unit on site, which most market players expected would be shut down because of lack of interest in the refinery.
With news of the possible joint venture, phenol-acetone producers will likely see less need to build cumene inventories, as supply will likely continue to outpace demand for as long as export opportunities into Asia remain constrained.
Major US cumene producers include CITGO, Flint Hills Resources, Georgia Gulf, Marathon, Shell Chemical and Sunoco.
($1 = €0.77)
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