US June cumene range lower on upstream pressure

01 July 2014 00:13 Source:ICIS News

HOUSTON (ICIS)--US cumene values fell by an average of 3 cents/lb ($66/tonne) for June, tracking this month's June benzene contract, sources confirmed on Monday.

The drop took cumene to a new range of 62-63 cents/lb, as assessed by ICIS.

Feedstock June benzene weakened by 9 cents/gal on improved supply from Asian exports, dropping to $4.48/gal from $4.57/gal the previous month. Refinery-grade propylene (RGP) prices fell by nearly 10% during May and dipped lower in June before inching upward this week.

Domestic propylene inventories ended the previous week down 1.7% versus a week earlier, according to the US Energy Information Administration (EIA). The decline is the second week-on-week drawdown, which sources said could continue to lead to higher RGP spot prices.

For May, cumene also was assessed lower by 3 cents/lb, in line with May benzene.

Cumene supply was sharply curtailed during a wave of upstream spring cracker and refinery turnarounds, but at least one major producer that dealt with shortages said feedstock cumene inventory levels were continuing to build.

In the derivative acetone market, June barge contract values dropped by 4 cents/lb, with most sources citing pressure from feedstock RGP.

Downstream, US May single-family home sales surged, and existing home sales increased as well, but according to the US Commerce Department, the domestic economy contracted by 2.9% on an annualised basis in Q1, the sharpest decline since the 5.4% downturn seen in Q1 2009 in the midst of the Great Recession.

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

By Larry Terry