14 December 2012 21:10 [Source: ICIS news]
HOUSTON (ICIS)--US December cumene contracts settled at a rollover, sources confirmed on Friday.
Buyers and sellers said US December cumene contracts remained at 64-66 cents/lb ($1,411-1,455/tonne, €1,072-1,106/tonne) on an FOB (free on board) basis.
The reason December settled flat with November prices was because feedstock costs stayed steady, sources said.
The key cumene feedstock, benzene, gained only 3 cents/gal from November to December.
Additionally, refinery-grade propylene (RGP), another cumene feedstock, was largely stable.
“When the feedstocks move as little as they did, you might as well roll it over,” a producer said. “We didn’t see any change in December.”
Buyers agreed, saying the supply/demand balance has also remained steady.
“The phenol business is difficult,” a phenol producer said. “Nothing is going well.”
With downstream operating rates low, current cumene capacity is able to outpace demand, so cumene operating rates are also low.
This has pushed premiums for cumene over feedstock costs into the low-2 cents/lb level, sources said.
Sources agreed that for phenol and cumene operating rates to improve, exports of phenol would need to become more attractive.
However, US phenol producers are only able to obtain a 4 cent/lb premium over feedstocks for exports, well below where domestic premiums are.
With increased capacity in Asia and a weak market in Europe, sources do not expect phenol exports to improve in 2013.
Major US cumene producers include CITGO, Flint Hills Resources, Georgia Gulf, Marathon and Shell Chemical.
($1 = €0.76)
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