28 October 2013 00:00 [Source: ICB]
Production problems at Sasol push prices to their highest in 12 months on buyer panic
Spot prices in the European methyl ethyl ketone (MEK) market rose sharply amid tighter supply because of production problems at Sasol, pushing prices to their highest level in more than a year, market sources said on 18 October.
The average price the week ended 18 October, at €1,375/tonne ($1,858/tonne) matches the price on 5 October 2012.
A Sasol spokesman said on 18 October: “There were technical issues, but they have been resolved and we are working to restore stock levels.”
The spokesman did not give any further detail.
The plant in Moers, Germany has a production capacity of 65,000 tonnes/year.
“There was some kind of panic in the market. Some suppliers told us they’re sold out. It would be interesting to know how long this will go on,” a distributor said.
Some traders said they expect prices to fall in the next few weeks as producers restock to normal levels.
This is the fourth straight week of price increases in the MEK market. The rise, however, is purely due to limited supply and does not reflect any improvement in demand, which is still affected by uncertainties in the macroeconomic environment.
Spot prices as high as €1,600/tonne and as low as €1,250/tonne were heard but neither extreme were widely reflected elsewhere in the market.
The technical problems at Sasol come just a month after the company its force majeure from the Moers plant.
The plant was closed for a week in September due to “an unforeseen technical problem in the reactor section”.
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