Chemical Profile: Europe MIBK

06 December 2013 09:44 Source:ICIS Chemical Business

Methyl isobutyl ketone (MIBK) is mainly used in solvent applications, primarily for surface coatings. It is also widely used as an anti-ozonant in tyres, helping prevent or slow down degradation due to ozone exposure.

It is also used in rare-metal extraction, as a process solvent for pharmaceuticals and adhesives, and as a chemical intermediate. MIBK’s dewaxing and separating properties can be used to purify pharmaceuticals, mineral oils, tall oil, stearic acid and butanol.

MIBK is very useful in developing high-solid coatings because of its combination of high solvent activity and low density. In addition to its use as a solvent for inks, coatings and adhesives, MIBK is also used in the manufacture of germicides, fungicides, pharmaceuticals, electroplating solutions, and as a denaturant in many ethanol formulations.

Consumer products containing MIBK include aerosol paints, coatings used in automobile and construction and machinery paints and primers.

In Europe, demand for MIBK has been falling this year amid poor consumption because of weak macroeconomic conditions. The European Union’s GDP growth this year is forecast by the European Commission to be flat compared with last year, and the unemployment rate has been hovering close to 11% for most of 2013.

Demand was low during the summer and buying activity has not recovered with the onset of winter. On the supply side, distributors have said that producers have increased the level of competition by selling directly to end users, thereby cutting off the distributors in the process. Traders and distributors have frequently said that poor demand has led to deliveries of less than a truckload or sometimes no deliveries at all.

Latest data from European statistics agency Eurostat show that the level of imports of MIBK into the European Union were largely unchanged in the first nine months of the year, falling by only 0.6% to 15,478 tonnes from 15,573 tonnes in the same period last year.

Over the same period, MIBK exports from the EU to the rest of the world fell 15.4% to 4,247 tonnes from 5,020 tonnes.

At the time of writing, MIBK prices are at their lowest level since 10 Feb 2012, according to ICIS data. Prices have been on a general downtrend since September last year, though there was some sideways movement in March this year before the price falls continued.

The monthly contract price of feedstock acetone has risen by 11% between May and September. However, MIBK spot prices have fallen by 7% over the same period, indicating how prices are determined more by the balance between supply and demand, and less by the movement of feedstock prices.

MIBK producers’ margins are being squeezed. A producer attempted to increase prices in October to protect margins, but failed to do so because of weak demand.

There are two main routes to produce MIBK. One is a three-step process via acetone condensation, which gives diacetone alcohol that readily dehydrates to give mesityl oxide, which is then hydrogenated to MIBK.

MIBK is also produced from isopropanol (IPA) in a mixed ketones process with di-isobutyl ketone (DIBK) and acetone as coproducts. Methyl isobutyl carbinol, DIBK and mesityl oxide are coproduced or recovered during the process.

Market sources have said that demand for MIBK is likely to fall in December because of year-end destocking. Consumption is unlikely to see any huge increase, if any at all, next year because of a weak macroeconomic environment, sources said.

The current downtrend in the spot price of European acetone could also influence the price of MIBK. Acetone prices firmed from July to October, but after reaching a high of €1,010/tonne in the second half of the year, they went into a sharp decline because of low demand from the solvents sector.

MIBK demand will likely be influenced by consumption in end user markets like the car industry. Automotive sales in Western Europe are expected to remain weak, with sales reaching a bottom of 12m units in 2014, and largely remaining there for the foreseeable future – far from the historical peak of 2007, when 16.8m units were sold, according to a report in June by business consulting firm Alix Partners. On the other side of the coin, however, Central and Eastern Europe will continue to grow, adding about 2m vehicles in the next five years.

By Vladimir Guevarra