US April MEK contracts roll over as sellers anticipate more supply

10 April 2012 23:09  [Source: ICIS news]

HOUSTON (ICIS)--US April methyl ethyl ketone (MEK) contract values settled flat from the previous month amid expectations of increased competition from Asia, sources confirmed on Tuesday.

The rollover holds MEK contract values at $1.02-1.06/lb ($2,249-2,337/tonne, €1,709-1,776/tonne), as assessed by ICIS.

Buyers suggested no April contract price increases were proposed because although demand is “holding its own,” supply is ample.

“There’s plenty of demand, and there’s plenty of supply,” a buyer said.

Although producers did not comment on the rollovers, buyers suggested that with domestic supply continuing to improve, “no one wants to heighten interest in imports”.

Sources primarily cited the imminent restart of Japan's Maruzen Petrochemical MEK plant after more than a year offline. The 170,000 tonne/year facility was damaged in the wake of Japan’s earthquake in March 2011.

Contract values for March gained 9 cents/lb on higher production costs amid snug supply, but business has slowed and supply is accessible - especially cheaper imports, most sources said.

Feedstock butane at Mont Belvieu, Texas, was in a range of 188.50-190.00 cents/gal on Tuesday, down marginally from 189.50-195.50 cents/gal a day earlier.

US March ethylene contracts for March were settling initially at 55.75 cents/lb during the week, rising by 1.75 cents/lb from February as a result of higher spot prices last month.

US MEK suppliers include ExxonMobil, Shell Chemical and Sasol.

($1 = €0.76)

By: Larry Terry
1 713 525 2653

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