30 August 2013 17:22 [Source: ICIS news]
HOUSTON (ICIS)--The US cumene contract range for August settled nominally higher on Friday, in line with higher August benzene contract values despite ample cumene supply.
The increase moved August cumene values up by 2 cents/lb ($44/tonne, €33/tonne) to a new range of 62-63 cents/lb, as assessed by ICIS.
The increase was based on August benzene, which rose to $4.17 cents/gal, an increase of 10 cents/gal from July, based largely on higher spot values, sources said.
Cumene supply remains plentiful, due largely to weakness in the derivative phenol market where operating rates still hover at 65-70%.
Cumene availability, a source said, may have prompted more cumene use in gasoline blending. The product is also used as a component of high-octane aviation fuel.
One source of downstream weakness in the phenol chain is soft-to-modest polycarbonate (PC) demand from the US housing industry, which uses PC in appliances, home electronics and some building materials. Housing demand levels remains mixed, at best.
Spot phenol export values continued mostly stable but on a notional basis because little or no business is being done. Besides the lack of an export market to Asia, higher benzene values are diminishing spot export activity.
The US September benzene contract is expected to settle higher this week, following the recent run up in spot prices on the back of expected tight supply ahead of turnarounds in September and October, sources said.
Some market participants said they expect the September benzene contract to settle within a range of $4.40-4.42/gal, which is 23-25 cents/gal above the August contract price.
Major US cumene producers include Citgo, Flint Hills Resources, Axiall, Marathon, Philadelphia Energy Solutions and Shell Chemical.
($1 = €0.76)
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