For the Quarter Ending September 2023
North America
In the USA market, the third quarter of 2023 witnessed a continued decline in Methyl Ethyl Ketone (MEK) prices, driven by several key factors. Notably, limited procurement activities, stability in demand dynamics, and weak consumption offtake from downstream paints and coatings industries contributed to this price trend. The deceleration of procurement activities in the US market was a significant factor affecting MEK prices. This slowdown in procurement was also reflected in the pricing trends. However, despite this slowdown, the continuous rise in cost pressure from upstream sources and ample queries from downstream end-use industries acted as counterbalancing factors, resulting in the maintenance of firm prices for MEK in the US market. Additionally, the inflow of costly imports from the Asian region further impacted the market dynamics. The pricing stability in the Asian region, particularly in the several weeks leading up to September 22, 2023, influenced the import prices in the Western market. As a result, the prices of Methyl Ethyl Ketone remained unchanged, with assessments indicating a price of USD 1180 per MT CFR Texas. The influx of cheaper imports into the US domestic market contributed to the significant fall in MEK prices, further amplified by the sluggish price trend in the Asia Pacific region. Steady imports from neighboring countries such as China, South Korea, and Japan, coupled with declining prices in these countries, eased the import prices in the US market. Demand from downstream coatings and adhesives experienced stagnancy with limited new queries in the final two weeks of the quarter, and procurement activities remained largely stable, reflecting a wait-and-see sentiment in the domestic market.
APAC
The third quarter of 2023 brought about mixed sentiments in Methyl Ethyl Ketone (MEK) prices in the ASAP region. MEK prices exhibited a decline during the first month of the quarter, followed by an increase in the subsequent two months. The initial decline in MEK prices in the Japanese market during the first month of the third quarter can be attributed to weak demand dynamics, both domestically and internationally. Furthermore, cost support from upstream Butanol remained soft. The construction and electronics industries experienced a significant decline, and demand from downstream coating and adhesives industries stagnated, with limited new queries. However, a transformation occurred in the latter part of the quarter. Demand for downstream paints and coatings surged, and procurement activities were active, resulting in a considerable number of queries from market participants. Inventory levels decreased as queries remained proactive from downstream buyers. The recent production cuts announced by Saudi Arabia and Russia played a crucial role in supporting oil prices, extending their ongoing production and export cuts through the end of the year. This, in turn, solidified prices for upstream Benzene and subsequently contributed to an escalation in the production cost of feedstock Acetone and consequent cost support for MEK in the Japanese market. As of August 2023, Methyl Ethyl Ketone prices were assessed at USD 1214 per MT on a FOB Busan basis, marking the culmination of these market dynamics in the ASAP region.
Europe
In the European market, the third quarter of 2023 saw a continued decline in Methyl Ethyl Ketone (MEK) prices, driven by several key factors. Cheap imports from the Asian market, depressed demand dynamics, and limited cost support from upstream sources all contributed to this decline. One significant factor in the sharp decline of MEK prices was weak consumption offtakes from downstream paints and coatings industries. The disparity between contract and spot prices had a considerable impact on chemical producers in Europe, and this, coupled with persistent weak demand and international competition, continued to put pressure on operating rates. Domestically, production rates remained optimal, leading to abundant inventory levels both in the domestic market and at ports. The upstream Butanol market remained stable, particularly as Brent crude oil prices improved in the first week of July 2023. Consistent imports from the Asia Pacific region further influenced the market dynamics. However, demand from downstream solvent and Bisphenol A industries stagnated, with limited new queries and weak procurement activities. Additionally, soft cost support resulted from decreasing feedstock Acetone prices. The underwhelming performance of the construction industry, as highlighted in Dow Chemicals' quarterly report ending June 2023, added to the challenging market conditions. By August 2023, Methyl Ethyl Ketone prices were assessed at USD 1076 per MT FD Rotterdam, reflecting the culmination of these market dynamics in the European region.
For the Quarter Ending June 2023
North America
In Q2 2023, the USA market for Methyl Ethyl Ketone (MEK) witnessed a bearish trend with prices declining consistently. The weak demand dynamics in both domestic and international markets contributed to the downward trajectory of MEK prices. Cheap imports from the APAC region further softened the pricing dynamics, reflecting the market sentiment in the Asian market. The supply situation remained moderate, with ample inventories in the market, but the imports from Asian Pacific countries provided a cheaper alternative, putting pressure on prices. Meanwhile, the stagnant performance of the construction industry led to weak consumption rates of key petrochemicals. After the conclusion of Q2 2023, Methyl Ethyl Ketone prices in the US were assessed at USD 1950 per MT on CFR basis.
APAC
In Q2 2023, the Chinese market for Methyl Ethyl Ketone (MEK) witnessed a bearish trend with prices continuing their downward trajectory during the first and second weeks of June. The decline in prices can be attributed to weak demand dynamics both domestically and internationally. Demand from downstream industries, particularly paints and coatings, showed some improvement, but the ample supply availability in the market offset the optimistic change in prices. The supply situation remained moderate, with domestic production operating at optimum rates, resulting in abundant inventory levels in both the domestic market and at ports. Additionally, the upstream Butanol market remained sluggish, with crude oil prices sustaining their bearish trend, which contributed to soft cost support for MEK production. Demand from downstream industries like paints & coatings remained stable, but the consumption rates of key petrochemicals were weak due to the stagnant performance of the construction industry. The demand dynamics are expected to remain stable in the coming weeks. The fluctuation in prices of MEK was largely influenced by its raw material, 2-Butanol, which experienced significant price declines after reaching peak levels. As a result, the cost support for MEK production weakened, impacting the overall pricing of the product. The downstream demand for MEK remained moderate, characterized by limited new orders and sluggish supply-demand interaction. After the conclusion of Q2 2023, Methyl Ethyl Ketone prices in Japan were assessed at USD 1710 per MT on an FOB basis.
Europe
In Q2 2023, the European market for Methyl Ethyl Ketone (MEK) experienced a bearish trend with prices declining due to weak demand sentiment and underwhelming performance in the construction industry. The relief in energy prices did not have a significant impact on the market as the firm inflation rates and rise in interest rates affected the demand fundamentals negatively. The European MEK market faced tough competition from the Asian market, where imports were cheaper, adding further pressure on businesses in the region. Downstream demand from the paints and coatings industry remained soft, leading to decreasing consumption rates. Imports from the Asian Pacific market also contributed to softening pricing dynamics. The market situation remained bearish, with moderate supply and limited change in demand dynamics from downstream industries. The stabilization phase, followed by a rise in consumption from the downstream market, contributed to the scarcity of stocks and price normalization. However, the prevailing weak demand and insufficient procurement support resulted in low demand for MEK in the region. In June 2023, Methyl Ethyl Ketone prices in Europe were assessed at USD 1815 per MT on FD basis.
MEK prices moved in a downward see-saw trend during Q1,2023 in America, with prices ranging at USD 1545/ton CFR Texas. Investors were pessimistic in the US Logistic Industry, indicating that their anticipated growth rates were lower than they have historically. The production cost was also deteriorating, impacting the petrochemical prices in the regional market. There was a decrease in demand for MEK, due to which the prices of the product fell in the region. Decreasing growth of the product was caused by a moderate supply of the product in the regional market and steady production costs, with a shift in these factors and steady consumer confidence in the procurement of the products from the traders and the merchants. Relatively controllable inventory at the supply side of the product maintained a moderate stock of the finished product of MEK as well.
The prices of MEK fluctuated in China in a downward loop during Q1, 2023, with prices ranging from USD 1260/ton FOB Qingdao. The petrochemical demand was depleted from South Korea, Indonesia, Vietnam, and India, resulting in higher inventory levels. An oversupply of MEK in the regional market and a higher stock level of 2-Butanol with the traders and the merchants impacted the price of the product, and also, it was received that the quotations of MEK de-escalated. Fluctuation in the price of Crude Oil impacted the downstream market as well.
The market value of MEK was de-escalated in the European market with costs ranging at USD 1848/ton FD Rotterdam in Germany during January in the first quarter of 2023. There was, although, a rise in the freight charges from North Europe to East Asia as sourced by the suppliers. Due to plummeting consumption from the downstream adhesives market, there was a rise in the inventory level of the product. With wider economic constraints in the regional market, the market value of MEK decreased, as per quoted by the traders. A drop in the procurement of MEK for the manufacturing of downstream construction materials in the region affected the prices of those materials. Feedstock 2-Butanol demand also declined, resulting in lower prices for other petrochemical derivatives.
