Market and product

SINGAPORE (ICIS)--Spot methyl ethyl ketone (MEK) prices in Asia are likely to continue their uptrend on the back of tight supply and high feedstock costs amid stable demand, industry sources said on Friday.

On 13 September, MEK was assessed at $1,260-1,280/tonne (€932-947/tonne) CFR (cost & freight) SE (southeast) Asia, and at $1,230-1,250/tonne CFR NE (northeast) Asia – up by $10-30/tonne from the previous week – according to ICIS.

Global MEK supply remains limited as Chinese producers have been focusing on catering to its more buoyant domestic market, industry sources said.

MEK is being sold at higher prices in China’s domestic market, prompting local producers to shun exports.

Prices were assessed at yuan (CNY) 8,675-8,775/tonne ex-tank ($1,417.48-1433.82) in east China for the week ended 13 September, up by CNY375/tonne from the previous week, according to Chemease an ICIS service in China.

In south China, prices increased by CNY150-200/tonne over the same period to CNY8,750-8,900/tonne ex-tank.

In Japan, Idemitsu Kosan has decided to stop exporting MEK this month and in October given low operating rates at its 40,000 tonne/year facility at Tokuyama in Yamaguchi prefecture.

“Idemitsu Kosan Co is currently operating at 55% of its capacity … due to shortage of [feedstock] butylene (C4) until November,” a company source said.

The company will stop exports in September and October because it will “basically prioritise domestic demands”, the source said.

Another northeast Asian producer will shut its facility from mid-September to October, for tanks and berth maintenance, its customers and other market participants said.

Rising prices of feedstock naphtha have helped drive up MEK prices, with a number of northeast Asian producers running their plants at full capacity “looking to increase (their offers) to $1,300/tonne CFR SE Asia”.

At midday, open-spec naphtha prices were at $928-931/tonne CFR Japan, according to ICIS.

MEK buyers are finding it increasingly difficult to secure lower-cost cargoes and are reluctant to match the price ideas of suppliers because of uncertain market conditions.

In southeast Asia, demand has remained in a lull because the monsoon season has affected timely delivery of MEK to customers, and amid a weakening of regional currencies that makes imports more expensive.

MEK acts as a low-boiling solvent for nitrocellulose, acrylic and vinyl surface coatings, with over half of global MEK demand coming from the paints and coatings industry.

($1=CNY6.12 / $1= €0.74)