For the Quarter Ending June 2021
Offtakes of Methyl Ethyl Ketone (MEK) from the paints and coating industries witnessed a seasonal hike to cope up with the improved enquiries from the building and construction sector. Whereas the supply outlook observed a drastic change in the North American region owing to restoration of the industrial infrastructure at several major producers. Transportation and logistic delays continued to impact the regional availability despite an increase in the supplies from Asia and Europe. The pricing trend in the North American market stabilized in the second quarter after reporting strong gains amidst easiness supplies with FOB Texas discussion settled at USD 2140 per tonne in June.
Methyl Ethyl Ketone supplies in the Asia pacific region improved during the second quarter of 2021, however the demand outlook in the South Asian region was subdued due to the impact of second COVID wave in India. Hence, enquiries from the Indian buyers were limited in the first half of the quarter. Although, situation improved as the vaccination programmes picked up pace in India, the demand recovered proportionally. The pricing trend in India witnessed mixed results with FOB Mumbai discussions assessed at USD 1440 per tonne in June. Whereas the overall MEK market outlook in China remained balanced as the offtakes were consistent from the paints industries to fulfil the enquiries from the construction, automotive and renovation sector.
During the second quarter of 2021, the Methyl Ethyl Ketone market in the European region eased proportionally with EU being the key exporter in the previous quarter to major importer in this quarter for the North American region. Furthermore, improved operating rates at several producing plants post winter season supported the market outlook in the European region. Demand witnessed the seasonal hike from the paints and coating industries as the construction activities picked up pace and the offtakes were consistent from the automotive and renovation sector.
For the Quarter Ending March 2021
MEK supplies in the region were tight during the first quarter of 2021, due to the collapse of the industrial infrastructure as the several key feedstock plants shut their production in mid-February amid the extreme freeze weather conditions in the Texas and nearby Gulf region, creating global supply shortage. Demand took a leap after production hiccups ended in late March and consumption from the downstream construction and paint and coating sector surged. The FOB Texas prices witnessed a multifold surge in the first quarter showing an average hike of +USD 775/MT from January to USD 2085/MT for April deliveries.
Asian MEK market was balanced during the first quarter of 2021, as the export segment took an uptrend due to supply shortages occurring in the western regions. However, some constraints were witnessed during the Chinese lunar new year holidays which led to the shortage of key feedstocks in the northeastern Asian region. After the holidays, the situation balanced out as MEK plants operated at maximum efficiencies. Demand was stable due to constant consumption from the downstream solvent sector. Prices in the southeastern region took a downtrend with CFR JNPT prices in India assessed at USD 850/MT in March. In China, FOB prices surged by +USD 60/MT during the quarter.
The European market was sluggish as the supplies were balanced to tight during the first quarter of 2021, owing to reduced imports from the USA amid bad weather conditions, followed by the regional transportation hinderance in the Amsterdam-Rotterdam-Antwerp route. However, situation balanced out as a producer in the region struggled to manage their inventory levels ahead of turnaround period in the next quarter. Demand improved in the region as the offtakes from the automotive and construction sector surged, with the significant growth seen in exports.
For the Quarter Ending September 2020
Several large-scale manufacturers of MEK maintained relatively low operating rates in July-September quarter against the backdrop of subdued domestic demand. Few of the manufacturers were heard adopting a wait and see approach in the second half of the quarter as majority of downstream industries were either shut or were running at reduced rates under the fears of demand uncertainty as a repercussion of coronavirus outbreak. In September, demand for MEK witnessed a marginal rebound in China as the government carried out several initiatives to uplift the sunken economy. However, it was not enough to sustain the market for a good amount of time and compelled China to again long for exports. In India, the revival of automotive industry by the end of September showcased much-needed hopes towards stability of MEK market in the near future. CFR prices for MEK in India were assessed around USD 1135 per MT, witnessing a decline by USD 25 per MT from the previous quarter.
Ample imports of MEK from Asia during Q3 of 2020 directed excess supply to the European market, leading to a sharp drag in its market fundamentals. Resumption in operations of the automotive industry did not provide the expected push to the MEK demand as the overall offtakes were still quite low as compared to pre-lockdown levels. In addition, feeble demand from paints and coatings applications due to limited construction activities further delayed the rebound of MEK market in Europe. However, consumption of MEK viably increased for furniture-related to adhesives in comparison to its other segments.