US October cumene expected to increase on feedstocks

16 October 2012 20:06  [Source: ICIS news]

HOUSTON (ICIS)--An unexpected surge in feedstock costs appears set to push US October cumene prices higher, sources said on Tuesday.

US October cumene prices are expected to settle at 56-58 cents/lb ($1,235-1,279/tonne, €951-985/tonne) FOB (free on board), up by 3-4 cents/lb from September’s levels.

The gain is being attributed to a surprising increase in feedstock benzene and refinery-grade propylene (RGP) prices.

US October benzene contracts jumped by 20 cents/gal despite soft demand in the downstream cumene and styrenics markets.

A source said that the persistently high benzene prices are continuing to hurt cumene margins and is keeping operating rates down.

Meanwhile, spot RGP has gained 6-7 cents/lb since September cumene was settled, putting further pressure on the product.

Demand for cumene remains soft, with downstream phenol-acetone plants operating at lower than normal rates and year-end inventory control measures starting up.

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

($1 = €0.77)

By: John Dietrich

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