02 March 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European methyl ethyl ketone (MEK) prices firmed this week, the first time they have done so since 6 May 2011, because of rising upstream costs, buyers and sellers said on Friday.
MEK prices increased by €20-80/tonne ($27-107/tonne), or 1-5%, from last week, to €1,470-1,550/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Price increases had been expected since early February as rising upstream costs have lowered margins. However, weak demand and uncertainty over the sustainability of upstream naphtha and crude oil prices prevented prices from moving up last month.
“Naphtha [prices have] been up and down, so it’s hard to pass on increases. The [MEK] market has to believe the new price level for naphtha will stay,” a producer said.
Although consumption remains weak because of poor macroeconomic conditions, further price rises are expected during March if feedstock costs remain high.
“The [MEK price] increases are all on feedstocks, demand is not that good,” a distributor said.
Between 6 May 2011 and 24 February 2012 MEK prices fell by 24-39%. The MEK price on 6 May 2011 was a record high of €1,900-2,400/tonne FD NWE.
This followed damage to Maruzen Petrochemical’s 170,000 tonne/year site in
In the aftermath of the outage, European product was being diverted to
Although Maruzen’s plant remains shut and the MEK market is structurally tight, Asian buying interest has been weak since the second half of 2011 and European prices have gradually fallen back to what players believe is a new normal.
“To a certain degree, you can see that MEK prices are at their bottom,” a MEK distributor said.
Asian MEK prices are trading below European prices, at a euro equivalent of €1,043-1,065/tonne CFR NE Asia.
In US dollar terms, Asian prices are trading at $1,390-1,420/tonne CFR NE Asia, an increase of $40/tonne from last week, caused by higher feedstock costs.
Additional reporting by Lester Teo
($1 = €0.75)
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