MEK's Market Opportunities

Methyl ethyl ketone (MEK) is an excellent organic solvent with wide application. Presently, commercial production processes for MEK include the n-butylene method, the method of oxidizing butane in liquid phase and the isobutylbenzene method.
Ever since its production was first industrialized in the 1960s, the world's MEK production capacity has been growing steadily. As of the end of 2010, the world's total capacity of MEK was around 1.54 million t/a. Exxonmobil is the biggest MEK producer today, and Maruzen Petrochemicals Co., Ltd and Sasol come next.
In 2010, global total consumption of MEK was reportedly 1.1 million tons, going mainly into making solvents that are in turn used to make coatings (49% of MEK consumption), adhesives (16%) and printing inks.
1. China's production
China started its industrial production of MEK in 1960s. As of the end of 2011, China's total production capacity for MEK reached 470 000 t/a. Most MEK plants use domestic technologies. Shandong Zibo Qixiang Tengda Chemical Co., Ltd is China's biggest MEK producer, with a capacity of 140 000 t/a. In the coming years, several new MEK plants and expansion projects be put into operation in China. For example, Hebei Zhongjie Petrochemical Group Co., Ltd plans to expand its capacity to 50 000 t/a, Guangdong Maoming plans to construct a 30 000 t/a unit, PetroChina Jinzhou Petrochemical Company plans to construct a 30 000 t/a unit, and Formosa announced a plan to construct a 40 000 t/a MEK unit in Huizhou of Guangdong province. It is predicted that China's MEK capacity will exceed 550 000 t/a in 2015.


China's major MEK producers as of 2011
Producer    Capacity, thousand t/a    Remarks
Shandong Zibo Qixiang Tengda Chemical Co., Ltd    140    Domestic sec-butyl alcohol dehydrogenation process, adding 40 000 t/a capacity in 2011
PetroChina Lanzhou Petrochemical Company    60    Domestic sec-butyl alcohol dehydrogenation process, adding 30 000 t/a capacity in 2009
PetroChina Fushun Petrochemical Company    55    Domestic sec-butyl alcohol dehydrogenation process
China Bluestar Heilongjiang Petrochemical Complex    50    German sec-butyl alcohol dehydrogenation process, expanding capacity using domestic technology
Xinjiang Dushanzi Tianli High & New Tech Co., Ltd    40    Domestic sec-butyl alcohol dehydrogenation process
Hebei Zhongjie Petrochemical Group Co., Ltd    40    Domestic sec-butyl alcohol dehydrogenation process
PetroChina Harbin Petrochemical Company    30    Domestic sec-butyl alcohol dehydrogenation process
Jiangsu Taizhou Petrochemical Complex     30     German sec-butyl alcohol dehydrogenation process, renovating with domestic technology
Other    25    
Total    470


2. Import and Export
With the continuous growth of domestic MEK production capacity and actual output, China's import volume of MEK has decreased year by year, while export has grown gradually.


China's MEK imports and exports
Year    Imports/thousand tons    Average CIF price, US$/t    Exports/thousand tons    Average FOB price, US$/t
2005    121    921.2    33.2    1130.4
2006    94.5    891.1    28.1    907.3
2007    87.6    1017.2    18.9    1111.5
2008    49.9    1284.3    18.4    1402.8
2009    43.4    792.5    29.2    876.1
2010    29.8    1196.9    41.6    1290.8
2011    22.2    1540.9    93.5    2253.6


China imports MEK mainly from Japan, South Africa, United Kingdom and Chinese Taiwan region. In 2011, total imports from these four sources plummeted to 19 400 tons, a decrease of 34.68% year over year. Still, the four supplied 87.39% of China's total MEK imports. Meanwhile exports rocketed: China exported 62 500 tons to Korea, Japan and Indonesia combined, an increase of 124% year over year. These three countries took 66.84% of China's total MEK exports.
3. Consumption status and prospects
Driven by the fast development of several sectors - domestic construction, home furnishings, advertising equipment, automotive, electric appliances etc - China's demand for high grade coatings has been growing at an ever increasing rate. China's apparent consumption of MEK was approximately 270 000 tons in 2005, and reached 340 000 tons in 2010, with an average annual increase of 10.46%. The annual growth of apparent consumption averaged 4.73% between 2005 and 2010. In domestic market, the self sufficiency rate was 6.42% in 2000, rising to 67.48% in 2005 and reaching 103.47% in 2010.


China's MEK supply/demand in recent years   (thousand tons)
Year    Production    Imports    Exports    Apparent consumption    self-sufficiency rate
2005    182    121    33.2    269.8    67.46%
2006    221    94.5    28.1    287.4    76.90%
2007    231.6    87.6    18.9    300.3    77.12%
2008    251.6    49.9    18.4    283.1    88.87%
2009    293.6    43.4    29.2    307.8    95.39%
2010    351.8    29.8    41.6    340    103.47%
2011    -    22.2    93.5    -    -


Presently in China, Eastern China and southern China are the two major consumption regions, together accounting for 85% of the nation's total. In these two regions the industries that consume MEK have developed more rapidly than in other regions of the country. Japan, Korea and Chinese Taiwan operate many processing plants that consume MEK in China's eastern and southern regions. For example, Guangzhou Jin Zhu Jiang Chemical Corporation, Shantou Ocean Enterprises (Group) Company and Nanhai (Foshan) NAMHEN Resin Co., Ltd each consume more than 10 000 tons of MEK every year.
(1) Coatings
In the coatings sector, MEK is mainly used as a solvent for high-end solvent-borne environment-friendly coatings, such as polyurethane coatings, epoxy resin coatings, acrylate coatings and vinyl coatings, to replace traditional highly toxic solvents such as the benzene series. MEK helps coatings meet environmental protection requirements for low toxicity and total volatile organic content.
As a high end solvent, MEK can fully replace acetone in coatings. The replacement arose in China in recent years. With the rapid development of China's demand for high-end coatings, many of the world's leading coatings manufacturers have built plants in China and promoted applications of high-end coatings here. Production and application of high end coatings will surely promote the consumption of MEK, and in the coatings sector as a whole consumption is projected to reach 185 000 tons in 2015, with an average annual growth of 2.31% between 2010 and 2015, after an average annual growth of 4.1% between 2005 and 2010.
(2) Dewaxing of lubricant oil
Presently, Chinese refineries often use a mixture of MEK and toluene as dewaxing solvent for the production of lubricant oil. Consumption of MEK in this application grew at an average rate of 4.6% annually between 2005 and 2010, and will grow 3.72% annually between 2010 and 2015.
(3) Adhesives
In the production of adhesives, MEK is mainly used in solvent borne adhesives, particularly polyurethane based adhesives. In recent years, China's production of polyurethane adhesives has expanded continuously. Shoemaking consumes more polyurethane adhesive than any other sector. China's southeastern coastal regions host most of its shoe factories.
In the future, applications of polyurethane adhesives will expand continuously in China, gradually replacing chloroprene rubber. Polyurethane adhesive applications in construction, highway surfaces, caulking materials for airplane runways, and glass sealing materials for high-rise buildings have been expanding. Mainland China's total demand for adhesives and sealing agents is projected to grow at more than 10% per year. In 2005 China consumed around 80 000 tons of MEK in adhesives and sealing agents. In 2010 the consumption was 100 000 tons. The projection for 2015 is 115 000 tons.  
(4) Tapes
In the production of adhesive tapes, MEK is an excellent solvent of polyurethane. China's consumption of MEK in tape production was 13 000 tons in 2005, reached 20 000 tons in 2010 and will be around 25 000 tons in 2015.
(5) Other
MEK can also be used to make peroxides, methylpentene alkynol etc.
To sum up, China's total demand for MEK is predicted to reach 390 000 tons in 2015. The manufacture of coatings and adhesives will still be the major driver, projected to account for 77% of total consumption.

China's MEK consumption by sectors
Consuming sector    2005        2010        2015(projection)    
    Consumption (thousand tons)    Proportion/%    Consumption (thousand tons)    Proportion/%    Consumption (thousand tons)    Proportion/%
Coatings    135    50    165    48.53    185    47.44
Adhesives    80    29.63    100    29.41    115    29.49
Dewax of lubricant oil    20    7.41    25    7.35    30    7.69
Tapes    13    4.81    20    5.88    25    6.41
Other    22    8.15    30    8.82    35    8.97
Total     270    100    340    100    390    100



4. Conclusions
Based on trends in the global market, it can be foreseen that the growth of demand for MEK will slow down due to more numerous and restrictive environmental protection and health regulations in developed countries. In China the supply and demand of MEK have arrived at a balance, but continuing to build up MEK capacity could easily tip the balance toward significant overcapacity.  
MEK has a narrow range of application in China, mainly in the formulation of coatings and adhesives. To avoid underutilizing capacity, Chinese players should pursue R&D to expand MEK's applications in manufacturing resins, dewaxing lubricants and formulating high value-added fine chemicals, with the goal of making MEK production more profitable and sustainable.