US Oct MEK falls 8 cents/lb on lower demand, may drop further

24 October 2011 18:35  [Source: ICIS news]

HOUSTON (ICIS)--US methyl ethyl ketone (MEK) contracts fell by 8 cents/lb ($176/tonne, €127/tonne) in October on soft demand and more available supply, sources confirmed on Monday.

Some of the drop was attributed to September price weakness, but values were unchanged in September because of a lack of consensus during the period.

The decrease took MEK prices to 126-130 cents/lb, as assessed by ICIS, but market sources said prices could slip even further before the end of the month.

Weakness that began in August could take prices down another 7-8 cents/lb in the near term.

A producer said supply continues to outpace demand and that pressure from Asian imports also is exerting downward pressure on contract values.

A buyer disagreed, however, saying sellers have been lowering prices more slowly and that some supply is still tightly controlled although market-wide allocations are no longer being heard.

Prices had spiked globally in March after Japan’s earthquake and tsunami forced the shutdown of the country’s major regional MEK plant, operated by Maruzen Petrochemical.

But contract prices settled flat in July and appeared to signal the onset of weaker pricing.

Also, an indicator of future construction activity in the US reversed direction for September and plunged back into negative territory on continued weak economic conditions.

The American Institute of Architects (AIA) said its monthly Architecture Billings Index (ABI) was 46.9 for the month, a drop of more than 4 points, or nearly 9%, from 51.4 in August.

The September ABI score reflected a sharp decrease in demand for design services from AIA-member firms.

Feedstock pricing has been mixed.

Butane for Mont Belvieu, Texas, was 180-181 cents/gal heading into the weekend, down from 184.75-185.25 cents/gal one week earlier. But US ethylene spot prices rose recently on continued gains in feedstock ethane prices.

($1 = €0.72)

For more on MEK, visit ICIS chemical intelligence

By: Larry Terry
1 713 525 2653

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