Methyl ethyl ketone

Global methyl ethyl ketone (MEK) supply this year is expected to be constrained by a shortage of feedstock in Asia, while weak global economic conditions may continue to weigh on demand for derivative applications such as paint and coatings.

Chinese producer Taizhou Petrochemical is expected to complete its 80,000 tonne/year MEK project at Taizhou in Jiangsu province in 2013. This will increase the producer’s MEK production capacity to 110,000 tonnes/year.

However, a persistent shortage of feedstock butylene (C4) in China may continue to limit operations at the new plant and other Chinese MEK facilities, market participants said.

It is unclear if Japan’s Maruzen Petrochemical can secure enough feedstock to ramp up run rates at its 170,000 tonne/year plant in Chiba. The facility has been operating at reduced rates since restarting in early April, after being closed for more than a year. The operations of its feedstock supplier have not yet fully recovered after damage by the March 2011 earthquake.

Participants are cautious about the demand outlook next year in view of uncertain economic conditions in the US and Europe.

Markets in China may see a recovery in demand from the second half of February or March, in line with a seasonal increase in downstream operating activity after the Lunar New Year holidays. 

In Europe, demand might improve as a result of restocking after the year-end holiday period.

In the US, solvents producers are likely to be aided by snug supply in some markets. After a slow start, demand is expected to pick up in the second half of 2013, sources said. US MEK supply and demand is steady but soft, and some price weakness has been seen in the first quarter.

Updated to mid-February 2013