18 June 2012 07:16 [Source: ICIS news]
SINGAPORE (ICIS)--Asian methyl ethyl ketone (MEK) spot prices fell to their lowest level in about four months following sharp declines in benchmark feedstock naphtha prices and because of persistently weak downstream demand, industry players said on Monday.
The prices of MEK cargoes loading between the second half of June and July were at $1,305/tonne (€1,031/tonne) CFR (cost & freight) northeast (NE) Asian on 15 June, a level last seen in mid-February, according to ICIS data.
Participants said prices may face further pressure from low naphtha prices, which settled at around an 18-month low of $756-758/tonne CFR Japan on 15 June.
Based on a typical MEK-naphtha price spread at about $400/tonne, most MEK buyers expect prices to fall to the $1,200s/tonne CFR Asia.
“We will be back in the market later to buy second-half July shipments. There is a high chance that sellers will lower prices given where naphtha prices are,” a distributor in southeast Asia said.
The weak market conditions this year are also reflective of the global economic slowdown, which has dampened the demand for MEK for applications ranging from polyurethane (PU) to paint and coatings.
Said one such buyer: “We rather focus on consuming our existing stocks, given the uncertain demand.’’
($1 = €0.79)
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