Asia’s MEK sentiment mixed after Golden Week

SINGAPORE (ICIS)–Asia’s methyl ethyl ketone (MEK) sentiment in the near term is mixed on differing outlooks after the week-long holidays in China.

(Source: Photo by Imagine China/Shutterstock)

China celebrated its 70th anniversary and National Day holidays from 1-7 October.

Domestically, the Chinese market restarted on a stable note, with local prices in the east at yuan (CNY) 9,500/tonne and CNY10,100/tonne in the south.

Downstream manufacturers were procuring some material after the holidays as they ramped up to full production.

“The market should be quite stable in the near term on existing short supply,” said a Chinese trader. “But ultimately local demand plays a very important role.”

Meanwhile, in southeast Asia, where the tight supply was immediately apparent in Vietnam before the Golden Week holidays, had eased as more cargoes had reportedly arrived on Vietnam’s shores.

Locally, Vietnam’s market fell from as high as $1,400/tonne DEL (delivered) before Golden Week to about $1,250/tonne DEL after the holidays.

“I just concluded several isotanks at 1,350/tonne CFR (cost & freight) SE (southeast) Asia for prompt shipping,” said a southeast Asian trader.

The trader was optimistic in the near term on continued tight supply in China.

Other importers in southeast Asia were adopting a wait-and-see mode, preferring to be cautious in times of uncertainty.

Some market players in northeast Asia were bearish, lamenting that MEK prices “rose too much, too quickly, in such a short period of time”.

However, market players reached a consensus on one point – the strong market is due to short supply.

“Whether the prices can sustain in the near term would depend on demand,” said several market players.

ICIS data on 4 October showed prices at $1,125/tonne CFR NE (northeast) Asia, $1,135/tonne CFR SE Asia, and $1,110/tonne CFR India respectively.

MEK’s main application is as a low-boiling solvent, with half of global demand derived from the paints and coatings industry. MEK can also be used in rubber-based industrial cements, printing inks and in textile dyes.

Focus article by Yuanlin Koh