25 January 2013 21:01 [Source: ICIS news]
HOUSTON (ICIS)--The US January cumene contract was assessed 12% higher on Friday, tracking upstream costs.
Sources said January cumene settled higher by 8 cents/lb ($176/tonne, €132/tonne) at 72-74 cents/lb on an FOB (free on board basis).
“January cumene prices are definitely high,” a producer said.
December cumene settled at 64-66 cents/lb FOB.
The January contract is slightly below the record high, as assessed by ICIS, which was an average price of 75 cents/lb FOB, set in May 2011.
January prices are near record highs because of costs for feedstock benzene and refinery-grade propylene.
“We’re living in the world of $5 benzene,” a cumene buyer said. “It can work, but it makes everyone shudder.”
January benzene contracts settled at a record high for the third month in a row, while RGP spot prices gained 12-16 cents/lb from the end of December.
“The cumene guys can’t run hard, and the phenol guys aren’t running hard either,” a cumene producer said.
With cumene operating rates low, sources said supply isn’t tight because any surge in demand would be handled by increasing the rates.
However, demand for phenol, which is the main driver of phenol-acetone production, is not expected to increase soon, owing to cheaper prices for Asian material and a lackluster US economy and construction market.
Major US cumene producers include CITGO, Flint Hills Resources, Georgia Gulf, Marathon, Philadelphia Energy Solutions and Shell Chemical.
($1 = €0.75)
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