US MEK prices poised for drop after 9-month rally

02 June 2005 01:04  [Source: ICIS news]

HOUSTON (CNI)--US methyl ethyl ketone (MEK) contract prices are expected to decrease by at least 5 cents/pound ($110/tonne) for June, sources told CNI Wednesday, citing weaker feedstock costs and supply/demand uncertainties.

 

The anticipated decline will end a nine-month climb to historically high prices.

 

Since September 2004, US MEK values have enjoyed unprecedented high levels, from the upper 50s cents/pound to as high as 80 cents/pound in April this year.

 

But sources now say US MEK prices could shed a minimum of 5 cents/pound, once contract negotiations are concluded in the next week or two.

 

Sources point out, however, that even if June contracts settle lower as expected, MEK prices still would be at notably high levels in the upper 60s to low 70s cents/pound range. One year ago, MEK values were assessed in the low-to-mid 40s cents/pound range.

 

The impending downturn for US MEK is said to be a result of weaker raw material costs, softer global demand and rising inventories.  Despite these factors, US demand is described as stable although not as robust as orders seen in the fourth quarter 2004.

By: Carolyn Green
+1 713 525 2653

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