Firm seeks 5 cent/lb MEK hike as prices hit 2-year high

Focus story by Andrew Guy

HOUSTON (ICIS)–As US methyl ethyl ketone (MEK) prices hit their highest levels in two years and market participants wonder if rates have peaked, another potential increase hits the market.

ExxonMobil is seeking a 5-cent/lb ($110/tonne) hike for MEK for 8 September.

In the announcement, the company cited “response to market conditions” as the reason for the increase.

MEK domestic prices – which are currently at 91-93 cents/lb – are already at their highest levels in two years. The last time MEK was at that level was August 2012, when prices were at 91 cents/lb. Since May of this year, MEK prices have increased by 13%.

On Monday, several sources within the MEK market questioned if prices could go any higher.

“I think it’s gotten as high as it can go,” a source said. “But, you never know. It would not surprise me if they go any higher.”

Another source said that the 2012 increase was driven by the earthquake and tsunami that hit Japan in March 2011. The event had a wide-ranging effect on the global petrochemical industry, particularly MEK.

It forced the shutdown of the Maruzen Petrochemical MEK plant, which was the largest MEK producer in Japan.

“The last time, MEK increases were because of the tsunami that hit Japan,” the source said. “That was the reason that MEK went up. But this time, I’m not seeing it. It just seems that MEK is tight enough at this point, and I think we’re starting to reach the limit on how high MEK can hit. Coatings season is kind of ramping down at this point.”

Major suppliers of US MEK are ExxonMobil, Dow Chemical, Sasol and Shell.

The following lists US MEK prices in cents/lb.