23 August 2013 09:28 [Source: ICB]
Methyl isobutyl ketone (MIBK) is mainly used in solvent applications, primarily for surface coatings. It is also widely used as an anti-ozonant (a substance that prevents or slows down degradation due to ozone) in tyres. It is a stable, colourless liquid with a pleasant, mild odour.
It is an active solvent for many synthetic resins, including cellulosics, vinyl copolymers and epoxies.
It is also used in rare-metal extraction, as a process solvent for pharmaceuticals and adhesives, and as a chemical intermediate. MIBK's dewaxing and separating properties can be used to purify pharmaceuticals, mineral oils, tall oil, stearic acid and butanol.
The US MIBK market has been quiet for most of 2013. The market had been described by many sources as balanced during the spring and summer months.
Several producers nominated price increases in July, but those increases failed to find buyers in the market. That lack of movement led to speculation that the US MIBK market may be leaning towards oversupply.
As the summer winds down, it is unclear if MIBK demand will increase. The paints and coatings season in the US got off to a slow start in 2013, as adverse weather in many parts of the country led to a delay in the beginning of the construction season.
The US housing and construction markets, however, eventually rebounded, with housing starts in the US increasing for several months of the year. Privately owned housing starts in July 2013 were at a seasonally adjusted annual rate of 896,000, according to the US Commerce Department. This is 6% above the revised June 2013 estimate of 846,000.
July's overall housing starts are nearly 21% ahead of July 2012, leading many to believe that the housing market in the US has fully recovered.
The housing market is a key downstream consumer sector for the chemical industry, driving demand for a wide variety of chemicals, resins and derivative products such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibres, among many others.
The increase in US housing sector activity has led sources to speculate that MIBK demand could increase as 2013 continues.
In China, Zhenjiang LCY General Chemical restarted its 24,000 tonne/year MIBK plant in Jiangsu province over the weekend of 10-11 August after keeping it off line for close to two months, market sources said. The plant had been scheduled to restart in early July, but weak market conditions prompted the company to postpone the resumption of MIBK production.
MIBK prices have remained flat for most of 2013. Price nominations by several US producers in July failed, leading many to believe that the market was oversupplied.
However, a hike in propylene prices for August has led several MIBK producers to seek price increases. Eastman Chemical, Sasol and Dow Chemical have announced 5 cent/lb ($66/tonne) price increases for MIBK for September.
It is unclear whether those price increases will hold, or whether they will have an impact on MIBK for the rest of the year. However, sources indicate that if propylene prices continue to increase, MIBK producers could seek to cover their margins and continue to pass along increases.
MIBK contract prices have remained at 110.000-115.00 cents/lb for several months, while spot prices have been between 107.00-110.00 cents/lb.
In China, yuan-denominated domestic MIBK prices have slumped by close to 22% since December 2012 to yuan (CNY) 13,100-13,300/tonne ($2,140-2,170/tonne) ex-works/ex-tank by early August 2013, spurred by the surge in spot imports.
There are two main routes to produce MIBK. One is a three-step process via acetone condensation, which gives diacetone alcohol that readily dehydrates to give mesityl oxide, which is then hydrogenated to MIBK.
MIBK is also produced from isopropanol in a mixed ketones process with di-isobutyl ketone (DIBK) and acetone as coproducts. Methyl isobutyl carbinol, DIBK and mesityl oxide are coproduced or recovered during the process.
The outlook for US MIBK consumption is unclear for the rest of 2013. The US market has been extremely flat for most of the year, but sources indicate the paints and coatings downstream sector could push up demand a bit.
US MIBK producers have not announced any increases in production of MIBK for 2013. Higher prices in feedstocks propylene and acetone could push prices up over the next few months. In addition, isopropanol - also an MIBK feedstock - has seen slight increases in spot prices over the last few months. This could also put pressure on MIBK prices.
MIBK producers in both Europe and Asia have also seen flat movement for the majority of the year.
If the US housing market continues to see increases month on month, it is possible MIBK demand will increase in the future.
Sample issue >>
My Account/Renew >>
Register for online access >>
|ICIS Top 100 Chemical Companies|
|Download the listing here >>|
Asian Chemical Connections