US October cumene contract gains 5.6% on surging feedstocks

19 October 2012 18:21  [Source: ICIS news]

Cumene contracts increaseHOUSTON (ICIS)--The US October cumene contract price gained an average of 5.6% on higher feedstock costs, sources said on Friday.

The US October cumene contract price was assessed by ICIS at 56-58 cents/lb ($1,235-1,279/tonne, €951-985/tonne) on an FOB (free on board) basis.

The October settlement moved higher by 3 cents/lb from September’s settlement of 53-55 cents/lb FOB.

Sources attributed the jump to surges in feedstock benzene and refinery-grade propylene (RPG).

The US October benzene contract price gained 20 cents/gal, while spot RGP prices moved up 6-7 cents/lb from the end of September into October.

“I am never surprised by the benzene market anymore,” a cumene producer said. “It’s got a mind of its own.”

The higher cumene costs are expected to continue curbing demand, as most downstream phenol-acetone producers will be forced to operate at low rates because of an inability to move spot material.

Although several spot phenol deals were heard for material shipped in October, the material was likely made with September cumene.

Additionally, prices for spot phenol were being done at low margins, making the production of additional pounds unattractive.

“We’re in the same boat we’ve been since May,” the cumene producer said. “People are only buying what they need.”

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

($1 = €0.77)

By: John Dietrich

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