Europe MEK prices reach 18-month high on limited supply

01 November 2013 19:10  [Source: ICIS news]

LONDON (ICIS)--Spot prices in the European methyl ethyl ketone (MEK) market continue to rise, with average prices hitting their highest level in 18 months due to limited availability in the region.

Sources said on Friday that recent production problems at Sasol are still disrupting supply.

Sasol is ramping up production back to normal rates, but some market participants said it may take some time for the company to fully restock. Sasol's MEK plant in Moers, Germany, has a production capacity of 65,000 tonnes/year.

A distributor was unable to cite prices to ICIS because its usual suppliers were not able to offer any material. A producer said it has no production problems but was getting short on supply because of many requests from customers.

Prices of MEK have been on a general uptrend since mid-July, purely because of tighter supply. The increase also comes despite the recent softening of prices of feedstock naphtha.

The tightness in supply is creating an artificial increase in demand for the material, sources said, with buyers wanting to buy MEK amid concerns that prices may increase further in the following weeks.

“When prices shoot up like this, people just want to get it before it further increases. The real demand from actual users is just stable. So, the price increase is driven up not by the end user but by distributors taking positions,” a source said.

Buyers argue that the level of real demand for MEK does not justify current prices, and they expect prices to fall when supply problems are resolved and Sasol resumes normal operations.

Spot prices of MEK were assessed by ICIS at €1,400-1,560/tonne ($1,892-2,108/tonne), up from a range of €1,330-1,500/tonne last week.

($1 = €0.74)

EU MEK prices reach 18-month high on limited supply

By: Vladimir Guevarra
+44 208 652 3214

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