US MEK rises 5 cents/lb on supply constraints

13 August 2010 23:10  [Source: ICIS news]

HOUSTON (ICIS)--US methyl ethyl ketone (MEK) contract prices were assessed up by 5 cents/lb ($110/tonne, €86/tonne) for August on supply constraints even as further increases were proposed for September, sources confirmed on Friday.

The new contract price range was assessed at $1.00-1.04/lb by ICIS.

Producers selling to mid-sized buyers reported little or no resistance, although one large-volume buyer said it would not accept any increases in August.

Sales controls remained in force among most sellers, but sources said one major producer had recently eased MEK allocations to 130% from 100% after persistent global shortages stemming from recent outages in Europe had begun to ease marginally.

The most recent MEK price increase was in July and was also predicated on globally short supply.

In the meantime, sources said a major producer had announced plans to raise contracts by another 3 cents/lb effective 1 September.

The producer “is just trying to wring the last few upward pennies out of it,” an MEK buyer said of recent supply shortages.

Several sources predicted that gains exceeding 20% in recent months will unravel quickly as soon as some balance returns to the MEK market. Some have suggested that could happen early in the fourth quarter.

US MEK suppliers include Shell, Exxon and Sasol.

($1 = €0.78)

For more on MEK visit ICIS chemical intelligence
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By: Larry Terry
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