01 April 2013 17:31 [Source: ICIS news]
HOUSTON (ICIS)--US March cumene contract prices softened on weak demand and falling upstream values, sources confirmed on Monday.
March prices fell by 9.4%, or about 7 cents/lb ($154/tonne, €120/tonne), largely on weaker feedstock benzene and refinery-grade propylene (RGP). The new cumene contract range is 67-68 cents/lb, as assessed by ICIS.
US spot benzene prices fell by 1-8 cents/gal in the past week amid downward pressure from price declines in Europe and Asia and improved availability during March.
US benzene trade sources, however, said April benzene is already at a premium, with spot levels about 5-15 cents/gal above March prices last week.
US RGP prices were flat late on Friday at 56.25-56.50 from a week earlier on a lack of trades during the week, but could move higher to start April on a slight rebound in spot polymer-grade propylene (PGP) values.
April propylene contracts, however, are expected to shed 6-7 cents/lb on soft demand and weaker spot PGP during most of March.
Most market participants do not anticipate a significant increase in cumene operating rates in the second and third quarters. A seller described cumene demand as poor, with most hopes for improvement linked to construction spending.
Economic signals from the home-building and home-buying markets have been mixed. Although there have been recent positive indications, US pending home sales edged down by 0.4% in February from January – a downturn blamed on a lack of available homes, which could further hamper a housing recovery.
In its monthly report, the National Association of Realtors (NAR) said its pending home sales index (PHSI) saw its third decline in the last four months.
Despite the long-awaited US housing recovery appearing to take hold, new-home construction is sputtering because it is being deprived of credit fuel and is facing uphill materials and labour costs, sources said.
Major US cumene producers include Citgo, Flint Hills Resources, Georgia Gulf, Marathon, Philadelphia Energy Solutions and Shell Chemical.
($1 = €0.78)
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