US Cumene Prices Hold Steady Amidst Stable Demand and Production Balancing

Louisiana (USA): Cumene prices remained stable compared to the previous week as manufacturers balanced production costs with demand from end-use manufacturing units such as Methyl Meth Acrylate (MMA), Bisphenol A, phenol, and other solvents. One major factor impacting Cumene prices is the continuous increase in benzene prices in the domestic market. By the week ending March 8th, Cumene market prices were recorded at USD 1470 per metric ton, Free on Board (FOB) Louisiana, indicating stability and manufacturers' optimism about receiving more inquiries for Cumene in the US market in the coming weeks.

Experts predict slower growth in home prices in 2024 compared to previous years. The rate of fluctuation is expected to vary regionally and will be heavily influenced by local market supply. Low housing inventory is favoring sellers, even though mortgage rates have slightly decreased. High home prices are discouraging potential buyers, and additional rate decreases could spur activity. This is because the paints, pipes, and coatings sector might reduce its demand for MMA, leading to a decline in demand for Cumene in the US market. However, due to historically high prices and limited inventory, many potential buyers and sellers are cautious about the Cumene market.

In other industries like energy, extractive industries, pharmaceuticals, and construction, similar investment decisions are emerging. There are indications of a trend reversal across these sectors. The upcoming week will see the release of key data on US inflation and activity, along with monthly output and labor market reports from the UK. Major developed economies will also release final GDP and inflation data, along with other tier-2 data globally.

The slight rise in Cumene inventories is attributed to several refineries in the US restarting production recently. Many refineries had shut down due to winter and maintenance-related issues impacting the energy supply issue accompanied by the increased Cumene production cost of the commodity.

Consumer prices in the U.S. rose notably in February due to higher gasoline and shelter costs, indicating some persistence in inflation and reducing the likelihood of a Federal Reserve interest rate cut before June. Despite this, the Labor Department's report, which showed a second consecutive month of stronger inflation, suggests a continuing disinflationary trend. Americans concerned about inflation found some relief in lower prices at supermarkets and for medical expenses.

The cost of producing Cumene is directly linked to the price of its feedstock, propylene, in the domestic market. Propylene, a key chemical commodity, often experiences fluctuations in the global market due to changes in crude oil prices. According to ChemAnalyst, Cumene prices in the US market are projected to remain stable in the upcoming weeks, supported by moderate demand and consistent production levels.