Methyl ethyl ketone (MEK)

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Almost half the world’s production of methyl ethyl ketone (MEK) is used for paints and coatings. However, it is also used in glues, synthetic rubber, printing inks, and paraffin wax; for cleaning, degreasing and paint removal; for making other chemicals; to sterilise medical equipment; and as a gasoline additive.

ICIS monitors and analyses developments in key upstream markets. This includes crude oil and the relationship between MEK and competing commodities such as ethyl acetate, butyl acetate and acetone. We also keep track of downstream markets and seasonal demand.

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Methyl ethyl ketone (MEK) news

China extends ADDs on MIBK from South Korea, Japan, South Africa

SINGAPORE (ICIS)–China has imposed anti-dumping duties (ADD) on imports of methyl isobutyl ketone (MIBK) from South Korea, Japan and South Africa for another five years starting 20 March 2024, the Chinese Ministry of Commerce said. There were no changes in the duty rates, which range from 15.9% to 190.4% depending on origin. Company Duty rate South Korea   Kumho P&B Chemicals Inc 18.5%   All others 32.3% Japan   Mitsui Chemicals Inc 45.0%   Mitsubishi Chemical Corporation 47.8%   All others 190.4% South Africa   Sasol South Africa (Pty) Ltd 15.9%   All others 34.1% The ADDs had been in place for five years from 20 March 2018 to 19 March 2023, and were extended for another year of investigation. The ministry said scrapping the measure would result in re-occurrence of dumping.


INTERVIEW: German biofuels producer Verbio develops ethenolysis-based renewable chemicals project

LONDON (ICIS)–German biofuels producer Verbio is pushing into renewable chemicals with a €80 million -100 million commercial-scale ethenolysis project that will use rapeseed-based biodiesel to produce specialty chemicals. Strategic move to renewable chemicals; 17,000 tonnes/year of 1-decene, 32,000 tonnes/year of methyl 9-decenoate, (9-DAME); Produced from renewable rapeseed methyl ester (RME), using ethenolysis and innovative metathesis catalysts. Ethenolysis is a chemical process in which terminal olefins are degraded. In chemical terms, it is a cross metathesis. The "VerBioChem" project, adjacent to Verbio’s bio-refinery at the Bitterfeld chemicals production hub in Saxony-Anhalt state, is expected to be commissioned in 2025, Andreas Kohl, the company's head of specialty chemicals and catalysts, told ICIS. Regular production at the "first-of-its-kind" commercial-scale ethenolysis  plant should start in 2026, he said. Groundbreaking is scheduled for May. “To our knowledge, it will be the only plant worldwide to operate an ethenolysis process,” he said. 1-decene is mainly used to produce polyalphaolefins (PAO), which are used as group IV lubricants, Kohl said. The 1-decene market is estimated at about 500,000-700,000 tonnes/year, according to Kohl.  Producers of fossil-based 1-decene include INEOS, ExxonMobil, and Chevron Phillips Chemical (CPChem), among others. 9-DAME has applications in surfactants, lubricants, polymers and other specialty markets. While 9-DAME is currently not available on the market in larger quantities, Verbio sees it as a “platform molecule” for use in solvents, surfactants and lubricants, Kohl said. The Bitterfeld plant might also produce C18 diacids in various forms in the medium term, he said. Verbio has been in contact for a couple of years with partners and on request supplies customers with kilogram samples of 1-decene and 9-DAME from a pilot plant, he added. UNIQUE CATALYSTSThe company has developed a unique in-house process for ethenolysis, based on proprietary metathesis catalysts from its 100%-owned subsidiary, XiMo, Kohl said. The process allows the use of ethylene “as kind of a scissor” to split the biodiesel, he said. XiMo specializes in metathesis catalysts, specifically of "Schrock-type" tungsten, molybdenum and ruthenium complexes, he said. Richard Schrock, one of the founders of XiMo, was co-winner of the 2005 Nobel Prize in chemistry for his work on developing the olefin metathesis method in organic synthesis. To serve the ethenolysis plant’s captive needs, as well as the wider chemical industry, XiMo is investing in new capacity close to Budapest, Hungary The 10 tonne/year of metathesis catalyst project in Hungary, which will proceed parallel with the ethenolysis project in Bitterfeld, is due to be in production in 2026. XiMo’s metathesis catalysts “represents a new tool for the chemical industry", for use in industrial processes in the renewable, polymer, flavors and fragrances, agrochemicals and various other markets, Kohl said. STRATEGIC SHIFT TO CHEMICALS Verbio's biofuels are mainly sold into the energy market, “but this is not necessarily the future for us”, Kohl said. While the company has existing biodiesel-linked chemicals production (phytosterol and glycerin), it decided several years ago to expand in renewable chemicals in a bigger way – driven by an ambition to add more value to biodiesel, reduce Verbio's dependence on the biofuels energy market, and help "defossilize" the chemical industry, he said. “We want to become much more independent of the political decisions that are influencing the biofuels market, and chemicals will be a major part of the company in the future,” Kohl said. Although the chemical industry keeps working to reduce its carbon footprint, most of its products are based on carbon and will continue to be so, he said. The challenge, therefore, is to defossilize the industry, which means getting away from fossil-based carbon, leaving three main sources of carbon: carbon capture; recycling; and biomass, Kohl said. “Biomass is a very versatile, a very interesting source of carbon, and it is here today” as companies are already producing chemicals from biomass, he said. Verbio, with its expertise in biomass, is well positioned to expand in renewable chemicals, he said. With the ethenenolysis plant, Verbio will start to serve the chemical industry “with unique, renewable and biobased molecules with a low CO2 footprint”, Kohl said. “This will enable our customers to take a big step towards climate neutrality, saving CO2, attacking scope three emissions, and it will help to defossilize the chemical industry,” he said. The carbon footprint of the new ethenolysis plant will be “at least” about 70-80% lower than that of a fossil-based 1-decene plant, he said. Verbio is undertaking the project’s basic engineering and execution in-house, rather than contracting it out, he noted. FOOD VERSUS CHEMICALS Rapeseed (known as canola in North America) is readily available in Germany as it is part of crop rotation, Kohl said. While using rapeseed for chemical production could trigger debates similar to the “food versus fuels” controversy, it is important to realize that only about 40% of the mass of rapeseed is oils, he said. The remaining 60% is a protein-sugar fraction that is needed in cattle feed “to close the protein gap” and thus supports the food sector. If Germany did not have the rapeseed protein, it would have to import even more soya from South America, he said. He also noted that the use of biomass to make biofuels and other renewable products has been found to stabilize the overall agricultural market in Europe and provide farmers with sustainable income, thus keeping them in business. Verbio at a glance: Sales for the 12 months ended 30 June 2023: €1.97 billion. Employees: about 1,200. Operations in Germany, Poland, Hungary, India, US and Canada. Production of biodiesel and bioethanol: nearly 930,000 tonnes. Production of biomethane: 1.08 GWH. Existing chemical production: phytosterol and biodiesel glycerol (glycerin) CEO: Claus Sauter Headquarters: Zorbig, near Leipzig, Germany Source: Verbio Thumbnail photo source: Verbio Interview article by StefanBaumgarten.


INSIGHT: Indorama flags peak oil demand in possible plant closures

HOUSTON (ICIS)–While Indorama Ventures reviews six sites for possible closure, it will consider signs that oil demand will continue growing in emerging Asia while peaking in Europe and North America – a trend that would alter the regional costs of a principal polyester feedstock, making it more attractive to import it from Asia than make it in the West. Benzene, toluene and mixed xylenes (MX) are produced in refineries, and they are among the fundamental building blocks for the chemical industry. If oil demand peaks in the West, that would discourage refiners from expanding capacity or making the expensive investments needed to maintain existing production levels. That would tighten supplies for these building blocks, affecting costs for chemicals as varies as phenol, styrene and paraxylene (PX). By contrast, oil demand has yet to peak among emerging economies in Asia. There, refiners will continue to increase capacity to meet growing demand for diesel and gasoline. Supplies of aromatics should continue growing in those regions. Indorama is taking the prospect of peak oil seriously because a key polyester feedstock, purified terephthalic acid (PTA), is made from PX, and PX is extracted from MX. If Western PTA prices become too expensive, then it would make more sense for Indorama to shut down its high-cost plants in the West and purchase the feedstock from producers in Asia that can sell material at a lower price. Indorama did not specify which plants it could close. PEAK OIL IN WEST SPELLS END OF NEW REFINERIESIndorama expects oil demand in the West will soon peak, perhaps in 2025 or 2026, said Aloke Lohia, Group CEO of Indorama. He made his comments in an interview with ICIS. His comments are backed by statistics from the Energy Information (EIA). Outside of the post-COVID rebound in 2021, gasoline demand in the US has been running below pre-pandemic levels. In 2023, it reached a summertime peak of nearly 9.60 million bbl/day. That is more in line with summer levels in 2015. Given the outlook for oil demand in the West, Indorama is betting that refiners will unlikely make the pricey investments necessary to increase capacity. "No one is looking to build a new refinery," Lohia said. Refiners could even shirk from making the investments needed to maintain existing capacity. "We believe there will be de-growth in refineries in the West and hence high cost for crude oil derivatives that has hurt our competitiveness, especially in Europe," Lohia said in prepared remarks. Actions by refiners are bearing this out. LyondellBasell plans to shut down its Houston refinery because it cannot justify the capital expenditures needed to keep the 100+ year old complex running. Although ExxonMobil recently expanded its refinery in Beaumont, Texas, the last time a refiner made a comparable investment was in 2012, when Motiva expanded its refinery in Port Arthur, Texas. Several refiners have converted existing units to process vegetable oils and similar feedstock to produce renewable diesel and sustainable aviation fuel (SAF). LyondellBasell could convert its Houston refinery into a sustainability hub. OIL DEMAND TO CONTINUE GROWING IN EMERGING ASIAUnlike the West, Indorama expects oil demand to continue growing in emerging Asia. Governments in this part of the world have less aggressive schedules for reducing carbon emissions, with net-zero goals further out in the future, Lohia said. Reducing carbon emissions boils down to renewable electricity. Instead of producing power by burning coal and natural gas, countries would do so with renewable sources such as solar panels, wind turbines and hydropower. Renewable electricity could also be used to generate heat. Emerging economies have limited power production, and they want to use that electricity to rapidly industrialize, according to Indorama. De-carbonization and industrialization will compete for limited power generation. That will place a limit on the expansion of charging stations needed for electric vehicles (EVs). Until emerging markets build out electrical infrastructure, they will still need petroleum-based fuels. Consequently, emerging markets are giving themselves more time to reduce carbon emissions. In China in particular, some companies could rush to complete new expansion projects before decarbonization deadlines take effect, Lohia said. China already has too much capacity, so this building spree will worsen the supply glut. As it stands, crude oil processing in China reached 14.8 million bbl/day in 2023, an all-time high, according to the EIA. Growing refining capacity should increase supplies of aromatics such as PX, the feedstock used to make purified terephthalic acid (PTA). That should depress PTA production costs. INDORAMA'S PLANGiven the global outlook for chemical feedstock produced at refineries, Indorama is considering a plan that would reduce consumption of these feedstocks at its Western operations. Instead of producing feedstock at high-cost plants, Indorama would import the material from Asia. Production lost from any closures would be offset by increasing utilization rates at Indorama's low-cost plants. The move would significantly increase Indorama's overall operating rates and lead to double-digit returns on capital employed (ROCE) for the two businesses most exposed to MX, Combined PET (CPET) and Fibers. US SHALE MAY SPARE DOMESTIC PLANTSThe calculus is less straightforward for Indorama's US operations. Critically, these operations include methyl tertiary butyl ether (MTBE), an octane-boosting gasoline blendstock that is made with methanol and isobutylene. In the US, both of these chemicals are made from shale-based feedstock, giving Indorama a substantial cost advantage. When gasoline prices rise, Indorama's MTBE operations can earn the company very attractive margins. Those fat MTBE margins would offset the higher costs involved with producing PTA from PX extracted from MX. MX is another octane-boosting blendstock, so its price tends to rise and fall with that for gasoline. In effect, MTBE provides Indorama with a hedge against higher MX costs for its US PET operations. MX is not the only feedstock used to make PET. The other is monoethylene glycol (MEG), a chemical made from ethylene. US ethylene producers predominantly on ethane as a feedstock, giving them a cost advantage. For Indorama's PET operations in the US, shale gas gives the company a cost advantage on the MEG side and a hedge on the PTA side. Thumbnail shows bottle made of PET. Image by monticello/imageBROKER/Shutterstock Insight article by Al Greenwood


Indorama Ventures will divest, right-size assets and cut costs under revised strategy

LONDON (ICIS)–Fundamental long-term changes in global chemicals markets have prompted a significant review of strategy, Indorama Ventures said on Monday. The company suffered a heavy loss in 2023 against the backdrop of oversupplied markets and weak demand. Supply side pressure and weaker demand in China are among the factors that have created unprecedented industry conditions it said. It is shifting strategy to right-size operations, deleverage its business and cut costs. The company reported a 53% drop in earnings for 2023 as revenues fell by 17%, with fourth quarter EBIDTA down 46% on 8% lower sales. A net loss for the year of $310 million (from a profit of $884 million in 2022) included an asset impairment on an incomplete plant in Texas. The company said that it plans to reduce net debt by $2.5 billion to around $4.3 billion in 2026. This includes generating $800 million in cashflow from “operational improvements” and a further $1.7 billion from actions including divestments, “asset actions” and “select business listing”. The aim is to reduce its debt to EBITDA (earnings before, interest, tax, deprecation and amortisation) ratio to less than 3X. An asset optimization program is targeted at lifting the company’s operating rate from 74% to 89%, it said. This will include “moving to lower-cost facilities and right sizing manufacturing capacity”, it added. A further $450 million run rate of efficiency gains is planned to be in action by 2026. The sale of non-core assets and other “value unlocking strategies” aims to generate about $1.3 billion in cash proceeds. Indorama Ventures said that by leveraging sustainability innovation it can create an additional $350 million/year of value. Under the revised strategy the company’s Integrated Oxides and Derivative (IOD) business segment will be renamed Indovinya. Intermediate chemicals assets, including integrated purified ethylene oxide (PEO), ethylene glycol (EG) and methyl tertiary butyl ether (MTBE) assets will move to Indorama Ventures’ Combined PET (CPET) segment. Indovinya will focus on downstream products and for Indorama Ventures markets will include home & personal care, crop solutions, coatings & solutions and energy & resources, it said. A run rate of $527 million in efficiency gains was achieved in 2023 and the roll out of a new enterprise management system in 2024 will unlock further value, it added. A $308 million non-cash impairment was taken in Q4 2023 it said on the suspension of activity on the partially completed purified terephthalic acid (PTA)-polyethylene terephthalate (PET) joint venture with Alpek in Corpus Christi, Texas.


Commercial production at Methanex's Geismar 3 in Louisiana delayed until late Q3

LONDON (ICIS)–Commercial production at Methanex's newly constructed 1.8 million tonne/year methanol plant, Geismar 3, has been delayed, potentially until the end of Q3, the Canadian producer announced. During the plant's initial start-up, there were complications with the unit's autothermal reformer (ATR). In a press release, Methanex said that following inspections, there was significant damage to a large number of supporting refractory bricks in the ATR which needed replacing. It is estimated that the total capital cost will not significantly exceed the upper end of the capital cost guidance of $1.30bn. Gesimar 3 is located in Louisiana and was originally scheduled to start up in Q4 2023. In Methanex's Q4 earnings report last month, it said the plant was in the process of starting up and was expected to reach full rates in February. The producer said, "Based on the preliminary findings of its root cause analysis, management believes that this issue relates to complications in the initial start-up process and is not a plant design or construction issue." Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. Smaller amounts go into production of dimethyl terephthalate (DMT), methyl methacrylate (MMA), chloromethanes, methylamines, glycol methyl ethers, and fuels applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.


Asia petchem markets await China's demand signals after holiday

SINGAPORE (ICIS)–Asia's petrochemical markets will closely watch China's demand signals after the Lunar New Year holiday amid ongoing concerns about the country’s economic health. Asia markets eye China's post-holiday demand signals China's economic health remains central concern Prices likely to rise amid supply constraints Markets in Asia took a breather in the week of 12-16 February, with Lunar New Year holidays in China, Taiwan, Malaysia and Singapore, while countries such as South Korea, Japan and Indonesia observed public holidays as well. Market participants are cautious about the post-holiday market; while some downstream buyers will restock after the holidays, there is concern that existing inventory held by domestic China producers and distributors will largely satisfy demand until early March. PRICES LIKELY TO RISE AMID SUPPLY CONSTRAINTSPetrochemical prices in Asia are expected to continue to increase in February, supported by capacity losses from outages and run-rate reductions, according to ICIS analysts. Among the 31 major petrochemical commodities covered by the ICIS Asia Price Forecast, average February prices for at least 22 of these commodities are anticipated to increase. Ethylene (C2), butadiene (BD) and styrene butadiene rubber (SBR) are expected to lead in terms of gains. In Asia’s C2 market, end-users who have yet to settle March arrival cargo are expected to hit the ground running once most of players return to the market this week. In the southeast Asia C2 market, demand enquiries were largely heard from Thailand last week, while other end-users in Indonesia have begun to look towards the April window for spot cargo. "The Asia C2 industry is likely to be characterised by tight supply in the weeks to come," said Paolo Scafetta, ICIS senior olefins analyst. "February should see about 7% of total monthly nameplate capacity lost due to downtime unless unplanned events cause further technical hiccups." The upstream naphtha market in Asia should be influenced by a few bearish factors, Scafetta added. These include the shift from naphtha to liquefied petroleum gas (LPG) as an alternative cracking feedstock and an improvement in supply from March as naphtha cargoes are expected to increase as Middle East refineries return from their maintenance. Asia's naphtha market is likely to be plagued with volatility in the short term as tensions in the Red Sea will continue to disrupt supplies. In Asia’s propylene (C3) market, trade was largely subdued during the Lunar New Year break but picked up towards the close of the week with most market players, except China, returning from their holiday. Talks and discussions in Taiwan commenced at the end of the week after the holidays ended. However, the post-holiday buying sentiment weakened on the back of ample supply, leading sellers to progressively lower their offers and selling indications. With buyers in China largely away from the market, overall business activity during the week was muted. In southeast Asia, while demand was also heard in Malaysia and Indonesia, most buyers continued to hold back from purchases on the expectation that supply tightness might result in an easing in offers down the road. In Asia’s benzene market, post-holiday restocking is expected to pick up in the second half of February amid strong competition for April and May cargoes from global players. February and March benzene cargoes have been already sold out and April cargoes are in strong demand. Benzene buyers based in both Asia and the West had actively sought procurement since end-January, for pre-holiday and pre-summer stocking up respectively. Asia's acetone market looks poised to maintain its strength. This is due to the high prices of benzene, reduced production leading to tighter supply, and a resurgence in trading flows between Asia and the West. A significant increase in demand for Asia acetone from the US market is bolstering this trend. Limited supply in the US, a result of low phenol production and ongoing allocations, is driving this demand. Meanwhile, supply within Asia is also constrained as phenol/acetone producers scale back production in response to unprofitable margins and decreased demand for phenol in China. In the xylene markets, further support in the market will be dependent on downstream sectors after the Lunar New Year holidays, with eyes firmly on China. For paraxylene (PX), there remains optimism for gasoline-blending demand heading into the second quarter, with positive arbitrage window economics for exports to the West. Firm upstream naphtha prices have also provided some support for PX. Several market participants noted there had been pre-buying of mixed xylenes (MX) and toluene by gasoline blenders to the US. Demand and price developments in the downstream purified terephthalic acid (PTA) and polyester sectors will help provide clarity about whether high PX costs can be absorbed down the chain. Asia's butyl acetate (butac) and ethyl acetate (etac) markets are poised to stay afloat on anticipated post-holiday demand, albeit at a gradual pace. Sellers of butac in both China and the region largely maintained their spot offers for March loading prior to the Lunar New Year holiday. Spot butac prices were on a downtrend in the early part of the fourth quarter of 2023 and have climbed since December, in part driven by cost pressures upstream as suppliers worked towards mitigating compressed margins. Asia’s methylene chloride (MEC) market might be bullish after the Lunar New Year holiday, as rising demand is likely to shift the market to a more balanced state. Most buyers were in a wait-and-see mode, monitoring prices and observing what producers would offer after the Lunar New Year break, with market participants in southeast Asia eyeing a rebound in demand through Q2, around the Ramadan period. CHINA'S ECONOMIC HEALTH IN FOCUS ICIS analysts expect most of China's end-use consumption, including in industries such as agriculture and home appliances, to recover from March. The China government's Two Sessions policy meetings, widely seen as the most important political meeting of the year for the country, will be held on 4-11 March. ICIS analysts expect another series of policies to be introduced to stimulate economic growth. Further market and infrastructure investment can boost petrochemicals demand. Latest official data from China is pointing to some recovery from domestic tourism trips and revenues. Domestic tourism trips and revenues during the Lunar New Year holidays in China jumped by 34.3% and 47.3% year on year respectively, with their levels at 19.0% and 7.7% above pre-pandemic levels in 2019, data from the country’s Ministry of Culture and Tourism (MCT) shows. "Most official and private media channels have been reporting strong (or even exceptionally strong) Lunar New Year holiday consumption data, and markets risk getting caught up in the euphoria of the moment, under the supposition that China’s economy is suddenly bottoming out, driven by the Chinese people’s hidden passion for spending," research analysts from Japan's Nomura Global Markets Research said in a note. "Although we do see some strength in the data, we urge market participants to exercise caution," it said, adding that China's property sector continued its downward spiral, right before the Lunar New Year holiday, and there was no sign of a recovery during the holiday. "Despite the positive [Lunar New Year] data, we maintain our view that the ongoing economic dip is likely to worsen into the spring," Nomura said. With additional reporting by Josh Quah, Julia Tan, Seng Li Peng, Angeline Soh, Helen Lee, Keven Zhang, Melanie Wee and Samuel Wong Focus article by Nurluqman Suratman Thumbnail photo: Lunar New Year lanterns in Shenyang, northeast China's Liaoning Province, on 1 February 2021. Asia will closely watch China's demand signals after the Lunar New Year holiday amid concerns about the country’s economic health. (Source: Xinhua/Shutterstock)


PODCAST: Red Sea issues dominate Europe phenol, acetone and derivatives markets

LONDON (ICIS)–Red Sea shipping issues have been the hot topic in Q1, with import delays opening up domestic demand opportunities and leading to a firmer price sentiment in some markets. There has been some increase in buying in January, but underlying demand is yet to recover in a shaky macro-economic climate. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Mathew Jolin-Beech (methyl methacrylate) and Meeta Ramnani (polycarbonate) discuss the impact of rising sea freight and feedstock costs in the acetone, phenol and derivatives markets. Phenol and acetone markets look to downstream demand pull for support Red Sea crisis set to continue impacting MMA supply for remainder of Q1 Europe epoxy and BPA markets exposed to Red Sea issues/import delays, tendency firmer European PC suppliers benefiting from the unavailability of Asian imports Podcast editing by Meeta Ramnani


Mitsubishi may make FID on new US MMA plant in Q2

HOUSTON (ICIS)–Mitsubishi Chemical America could make a final investment decision (FID) on a new methyl methacrylate (MMA) plant in the US in the second quarter, with start-up possible in 2028, the company said on Thursday. The plant, called the MCA Geismar Site, is proposed to be built in Ascension Parish in Louisiana state, and it will produce 350,000 tonnes/year using the company’s Alpha process technology. The site will also include a carbon monoxide (CO) plant, a methanol plant and a formalin plant. This will be the third plant that features the Alpha process, which uses ethylene, methanol and CO to make MMA. If Mitsubishi Chemical decides to move forward on the project, then construction could start in the second half of 2024, the company said in a statement. It should end in 2028, with operations starting later that year. The project already has achieved some regulatory milestones. The Louisiana Department of Environmental Quality (LDEQ) had scheduled a public hearing for the project for 1 February. In 2023, the regulator made a preliminary determination to approve construction of the project. Mitsubishi Chemical expects the department to approve its air permit application in March or April 2024, it said in a statement. ETHYLENE-BASED MMA MAY UPEND MARKETMMA is typically made from acetone, which is a co-product of phenol production. Mitsubishi as well as Roehm are building MMA plants that use ethylene and methanol instead of acetone as a feedstock. Roehm calls its process technology LiMA, and it will be used in a 250,000 tonne/year plant it is building on the Gulf Coast. If these new technologies proliferate, then they would create a new end-use for ethylene, and they could slow down the growth for a traditional outlet for acetone. Not only could that have ramifications for acetone, but the new MMA technologies could affect phenol markets. Phenol and acetone are co-products and are ultimately derived from benzene and propylene via cumene. Thumbnail shows an item made of polymethyl methacrylate (PMMA), which is made from MMA. Image by Shutterstock.


Mitsubishi's proposed US MMA plant reaches regulatory milestones

HOUSTON (ICIS)–A proposed methyl methacrylate (MMA) plant that Mitsubishi Chemical America plans to build in Louisiana has reached a couple of regulatory milestones, although the company has yet to announce a final investment decision (FID). The Louisiana Department of Environmental Quality (LDEQ) scheduled a public hearing for the project for 1 February. Earlier in 2023, the regulator made a preliminary determination to approve construction of the project. The plant, called the MCA Geismar Site, is proposed to be built in Ascension parish, and it will produce 350,000 tonnes/year using the company's Alpha process technology. The site will also include a carbon monoxide (CO) plant, a methanol plant and a formalin plant. This will be the third plant that features the Alpha process, which uses ethylene, methanol and CO to make MMA. ETHYLENE BASED MMA MAY UPEND MARKETMMA is typically made from acetone, which was a co-product of phenol production. Mitsubishi as well as Roehm are building MMA plants that use ethylene and methanol instead of acetone as a feedstock. Roehm calls its process technology LiMA, and it will be used in a 250,000 tonne/year plant it is building on the Gulf Coast. If these new technologies proliferate, then they would create a new end-use for ethylene, and they could slow down the growth for a traditional outlet for acetone. Not only could that have ramifications for acetone, but the new MMA technologies could also affect phenol markets. Phenol and acetone are both coproducts and are ultimately derived from benzene and propylene via cumene. Thumbnail shows polymethyl methacrylate (PMMA), which is made with MMA. Image by Shutterstock. 


General Motors, China’s BYD to invest over $2.0bn in EVs at Brazilian facilities

SAO PAULO (ICIS)–General Motors is to invest Brazilian reais (R) 7.0bn ($1.4bn) in 2024-2028 at its facilities in the country to implement a “complete renewal” of its vehicle portfolio focusing on production of electric vehicles (EVs), the US automotive major said this week. Meanwhile, China’s EV major BYD also announced this week it would invest R3.0bn at its facilities in Camacari, in the state of Bahia. The company purchased the plant from Ford in 2023. The Brazilian government approved at the end of 2023 the so-called Mover program, which envisages tax breaks and incentives for greener mobility. Both GM and BYD’s announcements were made after weeks of talks with the government, although details of the agreements signed have not yet been made public. The automotive boost this week will have been music to the ears of both automotive executives in Brazil and the government presided by Luiz Inacio Lula da Silva, in office since January 2023. For the former, the announcements could be a catalyst for further growth in EVs, a sector in which Brazilian producers are lagging versus other big producing countries. In the past decade, those executives have presided over a sharp fall in output, down the peak of nearly 3.5m units/year in the early 2010s to just over 2.3m units produced in 2023. Brazil’s automotive exporting prowess to the rest of Latin America has dwindled on the back of fierce competition from overseas producers, mainly Chinese. For the government, the announcements will be a relief after the Lula Administration has struggled to show any sign of a revival in manufacturing, a key promise to its core electorate. Manufacturing stayed in contraction territory for most of 2023. President Luiz Inacio Lula da Silva made sure this week to capitalize on both announcements, which were made in Brasilia’s Planalto presidential palace. Earlier in the week, he also presented a 10-year industrial policy plan envisaging incentives for green investments to the tune of R300bn. The Mover program is part of that plan. TURNAROUNDIn GM’s case, the announcement this week is a remarkable turn of events after the company and some of its workers in Brazil were involved in a legal dispute after GM implemented 1,200 redundancies without prior consultation with trade unions. A judge disregarded the redundancies and ordered GM to rehire all workers. GM is a key automotive producer in Brazil. The company operates three production facilities in the state of Sao Paulo: Sao Jose de Campos, Sao Caetano do Sul, and Mogi das Cruzes. The company said the investments would also include research and development (R&D) of “innovative and customized” products for the Brazilian market as well as the “creation of new” businesses. “The factories will also receive developments that will make them even more modern, agile, and sustainable,” said GM. A large part of Brazil’s current vehicle fleet can also run on biodiesel, an element which has greatly helped reduced the country’s emissions from the transport sector but has also made producers rest in their laurels in terms of EV production. “Brazil is strategic for GM’s global business expansion plan. In addition to being a vehicle export hub for South America, it has a large engineering development center and is a market with high growth potential with a vocation for new technology vehicles, in line with the predominantly clean energy matrix of the country,” said Shilpan Amin, president of GM International. The official announcement from GM did not mention EVs but used the wording “sustainable mobility” instead. However, in the ceremony where the investments were announced GM’s vice president for South America, Fabio Rua, said: “Our investments in Brazil are focused on sustainability. Our future is all electric,” as quoted by Bloomberg. The automotive industry is a major global consumer of petrochemicals, and chemicals make up more than one-third of the raw material costs for an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA), among others. ($1 = R4.91) Focus article by Jonathan Lopez


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