Uses

Methyl ethyl ketone (MEK) is primarily used as a low-boiling solvent for nitrocellulose, acrylic and vinyl surface coatings. More than half of global MEK demand is derived from the paints and coatings industry.

It can also be used in rubber-based industrial cements and printing inks and is a required solvent for the polymerisation processing of polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and styrene butadiene rubber (SBR).

A derivative, methyl ethyl ketone peroxide, is used as a hardening agent in reinforced polyester fibre glass manufacture.

Supply/demand

There is no US domestic production of MEK - the market is supplied entirely by imports. At the end of Q3 2020, US supply has loosened. The largest producers in Europe and South Africa do not have production issues, and a large Japanese producer completed a planned turnaround in the summer and is approaching its usual production levels.

MEK demand decreased in the US in the immediate aftermath of the coronavirus outbreak.

The construction sector was among the first to rebound, and market participants now say that even areas that were initially slow to recover, such as the automotive segment, have begun to improve from Q2.

The UK is the largest supplier of MEK, often making up more than a third of total US imports. South Africa is the second largest importer. Traditionally, the Netherlands was third but has been passed by Japan in the past 12 months. In 2019, US imports from China imports declined due to tariffs imposed by the US. However, China’s exports to the US have grown in the summer of 2020 since it began recovering from coronavirus shutdowns while most Western European countries were still in a state of lockdown during their first serious wave of cases.

Prices

MEK prices rose in Q1 2020 when supply was tight, and there were several production issues abroad. Even with demand weaker year over year, prices rose in March and April due to constrained supply. However, since May prices have plunged.

As of late September, five months after reaching their peak for the year, prices have declined by about a third and are at their lowest levels in the past 12 months.

Despite improving demand in Q3, prices have continued to fall on abundant supply.

Market participants are now monitoring whether increased shipping costs from Asia will impact price. There is a shortage of containers in Asia ahead of a high period of demand for many global products, including petrochemicals.

Technology

MEK’s main commercial route is the dehydrogenation of secondary butanol. Some companies make secondary butanol by hydration of n-butene with sulphuric acid. The alcohol vapour is fed into a multitubular reactor containing zinc or copper oxides as catalysts. The reaction takes place at 400-500˚C (752-932˚F) and pressures of less than 4 bar.

In Europe, liquid-phase technology is also employed using Raney nickel or copper chromate at 150˚C reaction temperature. Hydrogen is flashed off and the condensate is dehydrated by fractionation. The MEK separates from the resulting water-ketone azeotrope that is obtained, and the MEK is then distilled.

A newer technology involves direct oxidation of n-butene in solution with palladium and cupric chlorides as catalysts. In addition, MEK can be made as a by-product in acetic acid manufacture from butane.

Shell has also developed a phenol process from which MEK could become available, along with acetone, as by-products.

Outlook

The outlook for the global MEK market is mixed. The paints and coatings sector has outperformed expectations. At the start of the pandemic, the do-it-yourself (DIY) market propped up demand, and now, the housing and automotive market segments are improving.

Some market players say volumes requested by buyers are now comparable to pre-pandemic levels. On the other hand, supply is expected to be steady-to-long next quarter. In Q3, the increase in supply has outpaced improvements in demand and led to declining prices.

INEOS recently lifted a force majeure at a European facility, but at around the same time, a Japanese producer entered into a two-month turnaround.

In the short run, a key factor for the MEK market is the rising cost of international shipping due to container shortages, which is particularly impacting shipments from Asia. Since the US MEK market is so import-driven, it could be directly impacted by this shipping issue. ■