Antwerp (Belgium)- The Cumene prices in the European market have continued to rise steadily due to increased demand from end-use manufacturing sectors such as food, pharmaceuticals, cosmetics, personal care, and paints and coatings. Moreover, the tight supply of toluene and other petrochemical products in the European market has raised concerns among Cumene retailers and suppliers, leading to a continuous rise in Cumene prices.

This increase in Cumene prices is attributed to the limited supply from manufacturers and the stable availability of feedstock necessary production to meet the demand from sectors such as MMA, personal care, adhesives, and solvents in the domestic market. Propylene, essential for Cumene production, is seeing a more balanced spot supply due to the restart of a significant derivative unit and some production issues with crackers. On the week ending May 17th, the price quotations of Cumene were observed at USD 1316 per MT, CFR Antwerp.

On the supply chain side, Mass checks on lorry drivers' driving and rest times are taking place at the Port of Antwerp. Today, 300 trucks are being inspected for social fraud by the police, the Social Intelligence and Investigation Service (SIOD), and the European Labour Authority (ELA). Meanwhile, the supply side dynamics continue to remain sensitive to the escalating situation in Asia which is witnessing port congestions on key ports including several Chinese ports like Ningbo. This congestion has led to sharp rise in container rates and rising demand for containers in the European market.

Market players have reported a 17% weekly increase in freight rates from China to Europe. Despite this period typically being a slack season, especially for routes from Northeast Asia to Europe, experts attribute the recent rapid hikes in rates to sustained capacity demand, blank sailing programs, and the expectation that the Red Sea crisis will persist at least until year-end. Blank sailings and the Red Sea crisis are familiar factors in the container shipping industry. For around two years, the industry has been using blank sailings to manage the excess capacity built during the pandemic. Experts note that the market remains carrier-controlled, with capacity reductions continuing despite the Red Sea crisis.

According to ChemAnalyst, Cumene prices in the regional market are anticipated to continue rising in the upcoming weeks due to increased demand and higher production costs. The continuous tight supply of Cumene and constrained supply chain may continue to impact the final prices of Cumene in the domestic market.