30 April 2010 23:59 [Source: ICIS news]
LONDON (ICIS news)--Tight supply in the European methyl ethyl ketone (MEK) market has pushed prices up by €200/tonne ($263/tonne) this week, sources confirmed on Friday.
“I’ve never seen the MEK market as tight as it is,” one trader said.
MEK prices settled at €1,250-1,500/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Most producers said that they were now sold out of spot material for May delivery. Distributors also said that they were unable to source material.
Prices at €1,500/tonne were representative of the distribution market, according to market sources.
One trader said that if it could source material, it would be offering at up to €1,800/tonne.
Values at €1,800/tonne would bring prices to their highest level since ICIS records for MEK began in November 1999. The previous high was €1,600/tonne, reported from 22 October to 5 November 2004.
Tight supply was attributed to stronger-than-expected demand in March, which lowered production stockpiles. The majority of producers said that they were now sold out for the rest of May.
There was also speculation in the market that a major European MEK producer had experienced technical problems, but this could not be confirmed.
In other production news, Shell’s scheduled maintenance work at its 90,000 tonne/year MEK plant at Pernis, the
As a result, the company raised production rates, but the plant was not yet operating at full capacity, the source added.
“The MEK market is still extremely tight. We are back, but with limited availability,” said the source from Shell.
Tight MEK supply in
With etac spot offers regularly up almost €600/tonne ($658/tonne) less than MEK, some applications are able to substitute etac for MEK for, which has boosted demand for etac.
The downstream applications that are able to substitute etac for MEK were printing, automotives and a few niche applications, MEK sources said.
“There is always a risk people will start switching [to etac]. I would imagine they wouldn’t switch on price differentials – as in the printing industry, it’s a small part of their costs – but more likely on availability. It would cost them a lot if they had to shut down production,” said a producer.
Etac prices were mostly assessed between €840-870/tonne FD NWE. One etac producer said there was evidence of prices moving closer to €900/tonne FD NWE for May.
Low availability of MEK has driven prices sharply higher in recent weeks.
On 27 March MEK had been trading at €870-920/tonne, marking a €330-580/tonne increase in prices over the last month.
It is the sharp rise in MEK prices that has prompted players to consider switching to etac, they said.
($1 = €0.76)
Jane Massingham contributed to this article.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections