Price and market trends: US cumene contracts fall on weak demand

12 April 2013 09:50  [Source: ICB]

US March cumene contract prices softened on weak demand and falling upstream values, sources confirmed.

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 week ended 29 March 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.

US Cumene

US RGP prices were flat late on 29 March at 56.25-56.50 from a week earlier on a lack of trades, 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. Despite the long-awaited US housing recovery appearing to take hold, new-home construction is sputtering.

Major US cumene producers include Citgo, Flint Hills Resources, Georgia Gulf, Marathon, Philadelphia Energy Solutions and Shell Chemical.

By: Larry Terry
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