HOUSTON (ICIS)--US January cumene contracts are likely to fall on weaker benzene, but could roll over if feedstock refinery-grade propylene (RGP) prices strengthen further, sources said on Thursday.
December contracts were assessed at 46-47 cents/lb ($1,014-1,036/tonne) on an FOB (free on board) basis.
Projections call for a 1 cent/lb decline in January cumene, following a drop of around 1.5-2.0 cents/lb in benzene.
However, RGP prices have already gained around 1-2 cents/lb on a weighted average basis and could increase further through January.
Adders for cumene contracts over feedstock costs are under downward pressure, set to fall around 0.5 cent/lb.
This is because supply remains structurally long and will further lengthen on a mid-February idling of a downstream phenol/acetone unit.
Sources said demand in January has been somewhat steady at healthy levels, owing to attractive export opportunities for downstream phenol and very healthy margins on domestic acetone.
Major US cumene producers include CITGO, Flint Hills Resources, INEOS Phenol, Marathon, Philadelphia Energy Solutions and Shell Chemical.