13 July 2012 18:03 [Source: ICIS news]
HOUSTON (ICIS)--US July cumene contracts gained 3.6-3.7%, sources confirmed on Friday, largely because of higher benzene costs.
US July cumene contracts were assessed by ICIS at 55-57 cents/lb ($1,213-1,257/tonne, €994-1,030/tonne) FOB (free on board).
This represents an increase of 2 cents/lb from June’s assessment of 53-55 cents/lb FOB.
Producers and buyers said most of the increase came because the major feedstock, benzene, settled higher by 19 cents/gal in July contract negotiations.
The other key feedstock, refinery-grade propylene (RGP), has been mostly steady, helping keep the increase minimal.
“Demand is still very soft,” a producer said. “It’s all being driven by phenol at the moment.”
Operating rates are down because export demand for phenol, the key product, is weak.
Market sources also expect that cumene supply will tighten and operating rates will fall now that Sunoco has confirmed its 330,000 bblday Philadelphia refinery in Pennsylvania will remain running because of a joint venture between the company and The Carlyle Group.
The refinery has a 545,000 tonne/year cumene unit, although no confirmation has been received that it will continue running.
“It’s a little early to tell how that’s going to affect the market,” the producer said. “But it’s most likely a good thing going forward.”
Major cumene producers include CITGO, Flint Hills Resources, Georgia Gulf, Marathon, Shell Chemical and Sunoco/The Carlyle Group.
($1 = €0.82)
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