LONDON (ICIS)--Spot prices in the European methyl ethyl ketone (MEK) market have risen by €50-85/tonne because of a very tight market, sources said on Tuesday.
Players on all sides of the market said supply was severely reduced, and buyers needing spot material were facing substantial hikes in prices this week.
“There's been quite a rally … on MEK, it’s a tight market,” a producer said, adding: “€1,380/tonne is a new target price because the market is so tight. People are struggling to get material.”
One producer was said to be out of the spot market, while sources said two other producers were concentrating on contract volumes, leaving the spot market short.
While there were no offers heard below €1,350/tonne this week, there was speculation on how high spot prices could go.
“MEK is widening, from last week [prices were] definitely up,” a second producer said.
“In terms of price levels, [the] low end around €1,360-1,370/tonne free delivered (FD) northwest Europe (NWE) last week. [There are] some real peaks at the top end, €1,460/tonne not un-doable,” the producer added.
Prices up to €1,530/tonne were talked about by some sources, but there was not sufficient confirmation from the market to support prices at this level.
“There's no question, it’s been horrible,” a distributor said, referring to the market this week.
However, players said there is still room for higher prices in coming weeks if supply remains limited.
“For sure MEK is absolutely crazy. Almost no product available, maybe one truck left and right,” a second distributor added.
“Prices are really black market at the moment … When an end user is in trouble, buyers will pay anything,” the distributor said.
There was panic buying on the spot market last week according to another source, which does not expect prices to ease during August despite demand traditionally being lower in the month due to summer holidays across Europe.
Players are watching the market closely and waiting to see if the price spike continues into August.