US June cumene prices set for 11% fall on feedstocks

04 June 2012 16:05  [Source: ICIS news]

A Georgia Gulf plantHOUSTON (ICIS)--US June cumene contracts are expected to fall by 11% from May levels because of weaker feedstock costs, sources said on Monday.

Buyers and sellers are anticipating that June cumene contract prices will be 55-57 cents/lb ($1,213-1,257/tonne, €982-1,018/tonne) on an FOB (free on board) basis.

This would be down by 7 cents/lb from May’s settlement of 62-64 cents/lb FOB.

The biggest reason for the fall is the drop in feedstock US refinery-grade propylene (RGP) prices, which have sunk by 16.50-18.75 cents/lb in the past four weeks, as assessed by ICIS.

The bigger cumene feedstock, US benzene, also experienced a recent fall, with the June contract price dipping by 10 cents/gal.

However, the contract was expected to settle at a bigger drop earlier in May based on spot price weakness, but a rebound late in May limited the fall.

Premiums for cumene over feedstock costs are expected to remain steady, as the supply-demand balance is stable.

Demand is softer than normal because of lower operating rates at key downstream phenol-acetone plants, and supply is balanced with demand levels.

If demand continues to be softer than normal, however, operating rates at US cumene plants could be lowered.

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

($1 = €0.81)


By: John Dietrich
713-525-2600



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly