Steady Downstream Demand Keeps US Cumene Prices Stable

Louisiana (USA)- Throughout the first week of April, Cumene prices in the US market continued to maintain stability amidst a slow to stable demand outlook for Cumene from acetone, phenol, methyl methacrylate (MMA), and other solvents required by end-use manufacturing industries. The number of Cumene inventories in the US market is sufficient to meet both domestic and international demand, proportionally impacting the final prices of Cumene in the US market. A significant factor affecting Cumene prices is the consistent stability and slight decrease in Benzene prices in the domestic market.

As of the week ending April 5th, Cumene market prices were reported at USD 1450 per metric ton, Free on Board (FOB) Louisiana, showing stability. Manufacturers are optimistic about receiving moderate inquiries for Cumene in the US market in the upcoming weeks of 2024.

In the end-use industries, despite the current elevated mortgage rates, housing prices persist in their ascent due to a scarcity of available homes. Economists anticipate that any correction in the market will be minor, unlike the magnitude of the Great Recession. Analysts are confident that a housing market collapse is unlikely, attributing this to limited inventory, stringent lending criteria, and other influencing factors. In the middle of quarter one of 2024, new home construction in the US rebounded significantly from the weather-related slowdown earlier in the year.

Builders benefited from slightly better mortgage rates and a shortage of existing homes for sale. This resurgence contradicts the expectation of a "housing recession" that was anticipated to reverse some of the significant price gains in homes. The US housing market had begun to slow down towards the end of 2022, with home prices appearing to be on the brink of a correction. However, unexpectedly, home values started to rise again, defying expectations of a housing market crash.

The API's report showed a larger-than-anticipated decline in U.S. crude inventories last week proportionally impacting the final value chain of cumene . This news has boosted confidence in expectations of tighter supply, particularly as forecasts for increased demand continue to strengthen. The production cost of Cumene is closely tied to the price of its primary raw material, propylene, in the domestic market. Propylene, being a crucial chemical commodity, frequently undergoes price fluctuations globally due to shifts in crude oil prices. ChemAnalyst forecasts indicate that Cumene prices in the US market are expected to remain steady in the coming weeks, bolstered by steady production levels and moderate demand.