Europe MEK prices rise €200/t on tight supply

16 April 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--Tight supply in the European methyl ethyl ketone (MEK) market led to strong price increases of €200/tonne ($270/tonne) this week, the majority of buyers and sellers said on Friday.

This followed increases of €90-120/tonne in the previous week, which were also due to low availability.

MEK prices were now at €1,200-1,300/tonne FD (free delivered) NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing. Four weeks ago, MEK was trading at €840-870/tonne FD NWE.

“MEK – does it still exist? It doesn’t seem like it, because we can’t find it ever,” a distributor said.

Some sources saw prices as high as €1,500/tonne FD NWE and as low as €1,100/tonne FD NWE, but neither of these prices were seen as reflective of the market. Players said that the wide range of prices in the market reflected sporadic trades due to the lack of material.

The low availability was caused by limited production stock levels, which were the result of higher-than-expected demand in March. There were unconfirmed rumours of several production problems at plants across Europe, adding to the pressure on supplies. The majority of producers said that they were now sold out for the entirety of April.

“We are fully booked [for April]. There are now lots of people chasing a small amount of free molecule, and it’s pushing prices up,” a producer said.

Demand was outpacing supply, players confirmed, but added that consumption had been relatively low in the past couple of weeks due to the Easter holiday period. Some sources said that price increases would have been much sharper had demand been at normal levels.

“Demand has been quiet in the last two weeks because of Easter. It’s the same across all products. If it was normal demand, the price would be much higher,” a distributor said.

Overseas buying interest remained high, particularly from Asia, buyers and sellers said, as the strong US dollar versus the euro continued to make European prices attractive to buyers outside of the region.

($1 = €0.74)

For more on PA and OX visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Mark Victory
+44 208 652 3214

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