For the Quarter Ending September 2024
North America
In Q3 2024, the North American Cumene market experienced a significant decline in prices, with the USA witnessing the most notable price changes. Various factors contributed to this downward trend, including fluctuations in naphtha prices, a key feedstock for cumene production, and uncertainties surrounding global economic conditions.
The region saw a 30% decrease in prices compared to the same quarter last year, with a -9% drop from the previous quarter in 2024. Market trends pointed towards a challenging landscape, characterized by weakening demand from key sectors and ongoing supply chain disruptions. The correlation between crude oil prices and Cumene pricing remained evident, further influencing market dynamics and contributing to the overall downward price trajectory.
Despite rising tensions in the Middle East and output cuts by OPEC and its allies, concerns over supply shortages have not greatly impacted the market. Companies needed strategic inventory management and production scheduling to navigate conditions. While the market trended toward stability, carriers had to manage rate adjustments to maintain profitability. Naphtha prices had also fallen to four-week lows, easing pressure on the cumene supply chain as lower crude prices and reduced petrochemical demand offered temporary relief to producers.
APAC
In Q3 2024, the APAC region saw mixed Cumene prices, with a notable -17% decrease from the same quarter last year. Effective inventory management and production scheduling were crucial for companies to successfully navigate the prevailing market conditions. Although the market was moving toward greater stability, carriers had to manage rate adjustments and market dynamics carefully to maintain profitability and high service quality. In early September, cumene prices in the Chinese market rose due to increased demand expectations and positive domestic naphtha price trends. Price negotiations remained high, with reports indicating steady increases throughout the day, driven by surging upstream oil prices. Additionally, strong demand from end-use manufacturing units, including styrene and other aromatics, further boosted cumene prices. On a broader economic scale, crude oil futures rebounded to early-week levels as weaker Chinese demand concerns were offset by stronger U.S. demand forecasts, supported by GDP estimates and consumer spending data. Prices rose during the afternoon session of Asian trading, fueled by anticipation of China's factory and services activity data release, which was expected to prompt calls for additional stimulus from Beijing. Port congestion in China eased, with Ningbo and Qingdao seeing reduced delays, though severe congestion in India and ongoing issues in Singapore continued to affect global trade flows.
Europe
In Q3 2024, the Cumene pricing landscape in Europe witnessed a significant downturn, with prices experiencing a notable decline. This downward trend was predominantly influenced by a combination of factors such as decreased demand in key downstream industries, including polycarbonate, paints, and coatings, as well as the sluggish performance of sectors like agrochemicals and fuel and lubricants. These factors created a challenging market environment, forcing producers to cut production levels and grapple with substantial financial pressures. The correlation between naphtha prices, a critical raw material for Cumene production, and overall market costs played a pivotal role in driving prices lower. The strike by port workers at Bremerhaven and the Port of Hamburg disrupted operations for several days due to a dispute between workers' unions and the Central Association of German Seaport Operators (ZDS) regarding collective wage bargaining negotiations. As these negotiations entered their third round, there was a potential for further industrial action by port workers to push for their demands, which could have affected the cumene supply chain.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American cumene market exhibited a notable decline in pricing, reflecting a bearish sentiment throughout the quarter with several key factors contributing to this downward trend. Primarily, modest demand from end-use manufacturing sectors such as acetone, phenol, and other aromatics significantly influenced cumene prices. Additionally, persistent fluctuations in crude oil and naphtha prices, critical feedstocks for cumene, played a crucial role in this pricing dynamic. The petrochemical industry faced disruptions due to hurricanes affecting crude oil production and refining operations, particularly in offshore areas vulnerable to severe weather also leading to tight supplies.
Focusing on the USA, which experienced the most dramatic price shifts, the cumene market witnessed a consistent decline. Seasonal factors, including a reduction in construction activity and a winter slowdown, exacerbated the situation. The correlation between crude oil prices and cumene prices remained strong, with fluctuations in crude oil directly impacting cumene costs. The price of cumene in the USA saw a substantial year-over-year decrease of 9%, with a 5% drop from the previous quarter in 2024. The first and second halves of Q2 showed a further 4% decline.
Concluding the quarter, cumene prices in the USA settled at USD 1351 per MT, FOB Louisiana, underscoring a predominantly negative pricing environment driven by subdued demand, logistical challenges, and seasonal variations.
APAC
In Q2 2024, the cumene market across the APAC region has experienced a generally stable pricing environment. The stability in prices has been attributed to several influential factors. Firstly, the ability of retailers and end-use manufacturing units to strike a balance between supply and demand has played a crucial role. The steady demand from sectors such as acetone, phenol, and other aromatics has also maintained equilibrium in the market. Furthermore, the consistent crude oil prices, which significantly impact naphtha production, a key precursor for cumene have provided a stable foundation for cumene pricing.
Focusing exclusively on China, which has seen the most significant price changes, the market trends have shown a discernible correlation with broader regional dynamics. Despite global uncertainties, the Chinese market has managed to maintain stable pricing, largely due to sufficient inventory levels and moderate import volumes aligning with demand. The seasonality impact has been minimal this quarter, ensuring steady market conditions.
Compared to the same quarter last year, the prices have decreased by 9%, reflecting a more balanced market approach against last year's volatility. From the previous quarter in 2024, there has been a slight 1% increase in prices, indicating a marginal upward trend but still within stable limits. The price comparison between the first and second half of the quarter has shown no significant change, recorded at 0%, further highlighting the stability. Conclusively, the latest quarter-ending price of cumene in China is USD 1089/MT CFR Qingdao, underscoring a stable pricing sentiment that has been neither overly positive nor negative, but consistently balanced throughout the quarter.
Europe
In Q2 2024, the cumene market in Europe experienced a significant decline in prices, primarily driven by weak production costs and tepid demand from industries such as paints, coatings, and other solvent-consuming sectors. The drop in naphtha prices, cumene's primary raw material, was influenced by ongoing global geopolitical tensions and ample local stockpiles, which pushed down production costs across the region. Additionally, the Eurozone's industrial sector showed lackluster performance, with manufacturing output continuing to decline, although at a slower rate than in previous quarters.
Belgium, in particular, witnessed the most pronounced price changes. Factors such as decreased construction activity, government restrictions on new permits, and overall economic sluggishness contributed to the subdued demand for cumene. Seasonality also played a role, with the second half of the quarter seeing reduced activity compared to the first.
The quarter-ending price for cumene in Belgium stood at USD 1276/MT, CFR Antwerp, reflecting a stable yet consistently decreasing trend throughout Q2 2024. The pricing environment has been predominantly negative, as evidenced by the consistent and significant downward adjustments influenced by macroeconomic factors, market dynamics, and seasonal variances.
For the Quarter Ending March 2024
North America
Cumene prices in North America for Q1 2024 have experienced a downward trend, reflecting a negative pricing environment. Several factors have influenced market prices, including reduced demand in downstream industries, such as paints, coatings, and adhesives, and a seasonal winter slowdown. Additionally, the market has been facing oversupply conditions, leading to increased inventories and downward pressure on prices.
The decrease in cumene prices in the region has been consistent throughout the quarter. In the USA, which has seen the maximum price changes, cumene prices have decreased by 9% compared to the same quarter last year. The price decline from the previous quarter in 2024 has been recorded at 2%, indicating a continued downward trend. Moreover, there has been a 1% decrease in prices between the first and second half of the quarter, further highlighting the negative pricing environment.
The Q1 2024 ending price for Cumene in the USA is USD 1460 per metric ton, FOB Louisiana. This reflects the overall decreasing sentiment in the market and the stable prices observed towards the end of the quarter. Overall, the cumene pricing environment in North America for Q1 2024 has been negative, with prices showing a consistent decrease. The market has been impacted by reduced demand, oversupply conditions, and a seasonal slowdown, leading to downward pressure on prices.
APAC
In Q1 2024, the Cumene market in the APAC region experienced an upward trend in prices. The outcomes of the OPEC+ production policy meeting fell short of market expectations, as production cuts did not meet anticipated levels. Market negotiations were generally active, prompting major units to increase their listed prices. Downstream phenol and phenolic resins experienced a continual uptrend, with the East China market maintaining acceptable transaction levels. Shandong Refinery held onto inventory during the holiday season, anticipating a price upswing. The price of benzene (feedstock) was predicted to remain elevated and susceptible to changes. Naphtha prices, crucial for petrochemical production, rose in Asia due to drone strikes on Russian refineries and the shipping crisis in the Red Sea, causing disruptions in European shipments. Demand for acetone, phenol, and other solvents remained stable and continuous. The quarter-ending price for Cumene in China was observed at USD 1081 per MT CFR Qingdao.
Europe
In Q1 2024, the pricing environment for Cumene in the European region has been largely stable, with some fluctuations observed in Belgium. The overall market has been influenced by factors such as increased demand from downstream industries, higher production costs, and rising oil prices. Cumene prices in Belgium have seen a positive trend, with a moderate increase of 1.5% in March. This rise can be attributed to the growing demand from industries such as phenol, acetone, paints, and coatings, which has led to an increase in prices to balance the demand-supply chain. Additionally, higher local production costs and concerns about sourcing from Europe have driven the prices up. In terms of seasonality, the demand for Cumene has been affected by reduced construction activity and a seasonal winter slowdown. This has resulted in stability in prices during the quarter. Comparing the prices in Q1 2024 to the same quarter last year, there has been a significant increase. However, the percentage change from the previous quarter in 2024 has been moderate. Over the quarter, there has been a slight increase in prices, with the latest quarter-ending price recorded at USD 1395/MT of Cumene CFR Antwerp in Belgium. Overall, the pricing environment for Cumene in Q1 2024 in the European region has been positive, with stable prices and some moderate increases observed in Belgium. Factors such as increased demand and higher production costs have influenced the market dynamics.
For the Quarter Ending December 2023
North America
During the fourth quarter of 2023, the North American cumene market experienced a bearish trend characterized by a surplus of supply and moderate demand from downstream sectors. The oversupply situation in the market led to a decrease in cumene prices, attributed to reduced demand from industries such as polycarbonate, paint, and coatings, along with the customary winter slowdown. Freight charges also saw a moderation due to the diminished demand. The construction sector slowdown and decreased demand in various industrial markets, including agrochemicals, coatings and adhesives, fuel and lubes, contributed to lower sales volumes across all regions.
Production costs for cumene were weak, influenced by the low-cost support from upstream crude oil and declining chemical prices globally. In the United States, crude oil inventories saw a reduction, while the strategic petroleum reserve remained unchanged. Cumene prices in the US market observed a decline, settling at USD 1458 per metric ton, Free on Board (FOB) Louisiana.
Looking at the price dynamics, the percentage change in cumene prices in the USA during the Q4 of the previous year was -12%, while the percentage change from the previous quarter was -1%.
APAC
In the fourth quarter of 2023, the Cumene market in the APAC region experienced a bearish trend, primarily driven by a diminished demand outlook from downstream sectors like styrene, aromatics, and solvents. Supply levels remained low to moderate, with domestic refineries maintaining optimal production rates. However, as the quarter progressed, production rates decreased, aligning with a sluggish demand outlook. Buyers were favoured with new offers, encouraging higher order placements, and there was optimism for improved price dynamics in Q1 2024. The Chinese Cumene market exhibited stability with a moderate supply, and demand from downstream sectors like Acetone and Phenol remained consistent. Prices remained unchanged in the initial week of October 2023 due to Golden Week holidays. The latter half of Q4 saw destocking activities dominating, leading to an easing in prices. The peak of the festive season in the Asian market was anticipated to stimulate demand, subsequently exerting pressure on prices. The latest price of Cumene CFR Qingdao in China for Q4 2023 was reported at USD 1079 per metric ton.
Europe
In Q4 2023, cumene prices experienced a decline, primarily influenced by the insufficient cost support from crude oil, coupled with decreases in upstream benzene and downstream acetone and phenol prices. The European petrochemicals sector grappled with a combination of weak demand and oversupply. Widespread weak demand for chemicals prompted several companies across Europe to shut down plants. Belgium, anticipating its upcoming presidency of the Council of the EU, expressed its intention to resist relaxing state aid oversight within the European Union. A regional minister cautioned against the risk of a subsidy race or "subsidy war," highlighting the need to prevent disruptions to the internal market. Both Belgium and the Netherlands faced tight labor markets, with a job vacancy rate of 5% recorded in the third quarter of 2023. Throughout the month, the demand for cumene from industries such as bisphenol, phenol, and other solvent sectors remained weak, exerting downward pressure on the final prices of cumene. The latest price of Cumene CFR Antwerp in Belgium for Q4 2023 was reported at USD 1330 per metric ton.
