In March 2011, a magnitude 8.8 earthquake occurred on the northeast coast of Japan, resulting in the complete shutdown of three methyl ethyl ketone production enterprises of Marusan petrochemical, dongran chemical and Chuguang company. The production capacity of methyl ethyl ketone of these three enterprises is 170000 tons, 95000 tons and 40000 tons respectively, accounting for 18.4% of the total global production capacity. The earthquake caused an imbalance between supply and demand in the butanone market. In less than a month, the average price of butanone in China rose by more than 100%, breaking the threshold of 20000 yuan / ton, up to 24000 yuan / ton.
11 years later, affected by geopolitics, crude oil prices rose, adding to the market panic caused by Japan’s Fukushima magnitude 7.3 earthquake, and butanone prices rose to an all-time high. According to the data of commodity quotation platform “business society”, the average price of butanone was 1496667 yuan / ton on April 7, an increase of 85% year-on-year and 23% compared with the beginning of March. Butanone, also known as methyl ethyl ketone, is an environmental friendly organic solvent, which is mainly used in Pu slurry, coating and adhesive. Since March, the rise of crude oil price has driven the price of butanone raw material “C4 after ether” to 8300 yuan / ton. The cost is under pressure, supporting the rise of butanone price.
Source: Business Society
In mid March, crude oil rose and fell, and the price of C4 after ether fell simultaneously, but the price of butanone remained strong. Industry analysts said that China’s butanone price rise was also driven by tight supply in overseas markets, rising butanone prices in Europe and increased export demand in China. Data show that on April 7, the FOB Rotterdam spot price (middle price) was reported at 3945 euros / ton, up 1500 euros per ton from the beginning of March, or more than 60%.
The industry said that affected by the planned shutdown of two butanone units of Marusan petrochemical and dongran chemical in Japan, overseas supply is tightening and demand turns to the Chinese market. It is understood that China is the world’s largest producer of butanone, with an annual production capacity of about 700000 tons, accounting for 45% of the world’s total production capacity. Before 2010, China was a net importer of butanone. After 2010, China’s butanone production increased steadily and the market supply exceeded demand. This contradiction between supply and demand is mainly solved by export. In 2021, China’s export volume of butanone was 142400 tons.
According to the data of Huajing Industry Research Institute, due to the upgrading of China’s manufacturing industry in recent years, industries such as shoes, shoe glue, clothing and Pu slurry continue to transfer to Southeast Asian countries. It is expected that the demand for butanone in these regions will increase at an average annual rate of 5.4% in the next five years. China’s butanone is a substitute for benzene and other traditional solvents. Industries related to shoe adhesives, synthetic leather and automotive coatings are expected to increase by 2.4% annually.
According to surging news, the contradiction between supply and demand in China’s butanone market in 2022 is expected to continue to expand. Data show that since the first quarter of this year, China’s butanone manufacturers have started more actively, and the overall operating rate has been maintained at more than 74%, with a maximum of more than 80%. At the same time, China’s butanone has recently released new production capacity, Zibo Qixiang Tengda Chemical Co.Ltd(002408) ( Zibo Qixiang Tengda Chemical Co.Ltd(002408) , Zibo Qixiang Tengda Chemical Co.Ltd(002408) ) said that it is accelerating the 80000 T / a methyl ethyl ketone expansion project, and Anhui Zhongpu Petroleum Energy Co., Ltd. (Zhongpu petroleum) plans to put into production 120000 t / a methyl ethyl ketone unit in May this year.
Liu Ziyuan of Zhongyu information said that the strong price performance of butanone was mainly affected by the favorable supply side and the market mentality caused by emergencies. Recently, businesses may still have the intention to support prices, but the spread of the epidemic in China has triggered demand concerns. The superposition of high raw material prices has led to an increase in downstream psychological resistance and relatively weak domestic demand. It is expected that the short-term butanone market will continue to rise by a limited margin.
