Shell MEK allocation due to short-term production issues: sources

19 July 2013 19:54  [Source: ICIS news]

HOUSTON (ICIS)--Short-term production issues caused the 50% allocation announcement by Shell Chemical last week, market sources said on Friday.

Representatives from Shell were not able to confirm that information as of Friday afternoon.

Shell has a methyl ethyl ketone (MEK) production unit at Perris, the Netherlands, that produces 90,000 tonnes/year. Several sources said last week that the company announced a sales allocation.

However, a market source said this week it received notice from Shell that the allocation was due to a temporary production glitch that has caused a shortage of MEK for July and August.

Shell expects to be back at regular production by late August, the source said.

No other MEK producers were heard to have production issues during the week ending 19 July.

MEK prices globally have been flat to declining for most of 2013.

In the US, spot MEK prices are assessed currently at a range of 73.00-77.00 cents/lb ($1,609-1,698/tonne; €1,223-1,290/tonne).

In Europe this week, spot MEK prices dipped to their lowest levels in three years at a range of €1,060-1,105/tonne ($1,395-1,454/tonne).

One European distributor estimated that demand for MEK in the region during the first half of 2013 is down 10% year on year.

MEK prices in Asia were assessed as stable at a range of $1,185-1,200/tonne for northeast Asia and $1,220-1,250/tonne for southeast Asia, but producers in the region are reporting tighter margins.

($1 = €0.76)

By: Andrew Guy Jr
+1 713 525 2653

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