Sasol MIBK expansion in South Africa to cut acetone market supply

05 November 2009 20:34  [Source: ICIS news]

HOUSTON (ICIS news)--When Sasol’s methyl isobutyl ketone (MIBK) expansion at its Sasolburg, South Africa, complex is complete with the plant running at full rates, it will remove an additional 40,000 tonnes/year of Sasol’s acetone from the merchant market, the energy and petrochemicals company said on Thursday.

The expansion, which will double the site’s MIBK capacity to 60,000 tonnes/year, is still set to start up in December, a company source said. How soon the plant reaches full operating capacity depends on economic conditions, MIBK demand and how smoothly the start up process goes, the source added.

Sasol’s average annual production of acetone is about 180,000 tonnes. The existing 30,000 tonne/year plant currently consumes 40,000 tonnes/year of acetone feedstock.

“When both plants are running at full capacity, that will take 80,000 tonnes/year of acetone from the merchant market,” the source said. “The new plant will make us a smaller player in the merchant acetone market.”

Acetone buyers said Asia and Europe imports would likely be able to fill that void. Also, the US acetone supply could improve in 2010 if phenol demand picks up, an acetone trader said. 

US phenol/acetone plants have been operating at reduced rates all year as a result of weak demand for acetone's co-product phenol. The phenol market is largely tied to the downstream automotive and housing industries. 

US MIBK prices were 90-105 cents/lb ($1,984-2,315/tonne, €1,329-1,551/tonne), according to data from global chemical market intelligence service ICIS pricing. However, some buyers said the range had begun to narrow at the high end of the range, as those price levels largely were seen as untenable.

Additional reporting by Heather Doyle

($1 = €0.67)

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By: Larry Terry
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