14 May 2010 23:59 [Source: ICIS news]
LONDON (ICIS news)--European methyl ethyl ketone (MEK) prices have reached record highs this week due to tight supply, buyers and sellers confirmed on Friday.
“No one has material,” said a distributor.
Another distributor said: “A lot of end-users are looking desperately for material.”
MEK prices increased by €50-300/tonne ($63-375/tonne) this week, depending on market, to reach €1,350-1,800/tonne – their highest level since ICIS pricing records for MEK began on 17 November 1999.
All prices were settled on a free delivered (FD) northwest Europe (NWE) basis.
The previous record high was €1,600/tonne, reported from 22 October to 5 November 2004.
The majority of producers said that they were sold out of material for the rest of May.
Numbers at the top end of the range were representative of the distribution market, with producers reporting prices of €1,350-1,550/tonne and distributors’ prices starting at around the €1,500/tonne mark.
Some sources saw prices even higher, at up to €2,000/tonne, but this was not viewed as representative of the wider market.
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The wide range of prices reflected the supply shortages, with trading volumes erratic, sources said.
Tight supply was reportedly the result of unconfirmed production issues at several European plants.
The low availability was also attributed to lower production stockpiles as a result of stronger-than-expected demand in March and April, as well as a lack of imports.
“The shortages are due to production problems. I don’t know when they’ll be resolved,” said a third distributor.
The lack of imports was due to tight supply in overseas regions and the strong US dollar against the euro, which made material from other regions unattractive to European buyers, sources said.
Demand was strong, players reported, as buyers attempted to secure supply.
However, sources added that it was difficult to assess underlying demand, as consumption was being fuelled by the low availability of material.
“It’s likely some people will substitute. Customers say they may have to if they can’t get hold of product,” said a major producer.
Some sources in the MEK market said applications that could switch to ethyl acetate (etac), such as printing and automotive, would move away from MEK in order to ensure supply.
Etac was currently trading at €850-880/tonne, up to €950/tonne below MEK prices. Buyers were yet to confirm the substitution of material.
($1 = €0.80)
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