US cumene contract prices were stable for the week ended 29 July, but were expected to increase on expected higher feedstock costs.
Sources said that, with August benzene settling higher, and the possibility of higher propylene as well, formula-based cumene contracts should move higher.
Early estimates called for an increase of 3 cents/lb ($66/tonne, €46/tonne) month on month.
Demand for cumene remains stable at strong levels, mostly for use in phenol production.
US phenol producers continue to run their plants full-out or at high operating rates, keeping demand for cumene high.
After concerns that phenol production may need to slow down because of weaker margins from lower costs in Asia, prices have rebounded in that region.
As a result, cumene production will need to remain strong to meet the demands from the US phenol market.
Demand for cumene for acetone production is weakening slightly. Demand for acetone from the solvent market is soft, and is not being offset by the US methyl methacrylate (MMA) market.
With phenol margins strong enough to absorb the low margins for acetone, cumene should continue to see strong demand.
Cumene supply was described as available, with producers still building inventories after the shortage in the first quarter.
Feedstocks
The US August benzene contract price reached a confirmed settlement at an increase of 44 cents/gal on stronger spot benzene prices and lower production rates. The increase is the first for the contract price since May 2011.
US spot prices for refinery-grade propylene moved higher by 2.5 cents/lb, although deals done were at higher prices for smaller parcels, and thus were deemed not representative of the market.
($1 = €0.70)
This week on ICIS ( www.icis.com ):
29/07/2011 19:01 US July formula-based phenol contracts fall 6% on weaker benzene
29/07/2011 17:57 US August benzene contract rises for first time since May
28/07/2011 17:46 US pending home sales rise for second straight month in June
28/07/2011 15:41 INSIGHT: Default lies not in our stars but in ourselves
26/07/2011 15:40 US July barge acetone contracts fully settle down by 7% from June
