Introduction
Recently, the domestic methyl ethyl ketone (MEK) market has maintained a range-bound trading pattern. Shipping pressure on production facilities has gradually eased, and supported by cost factors, quoted prices have risen continuously. Holders' willingness to sell at low prices has weakened, driving the center of market negotiations significantly higher. As of press time, negotiated prices in the East China market are referenced at approximately 8,800–9,000 RMB/ton.
1. High Raw Material Prices Provide Continued Cost Support for MEK
Regarding raw material trends, the post-ether C4 market in Shandong exhibited high-level volatility from mid-to-late month. There was a divergence in operating rhythms between upstream and downstream sectors. Previously self-consumed resources from refineries were gradually released into the external market, leading to a steady recovery in C4 supply. However, multiple downstream alkylation units reduced loads or shut down, causing demand to remain weak. Under the dual squeeze of increased supply and shrinking demand, Shandong post-ether refineries faced sluggish shipments and inventory accumulation, pushing the price center downward. Although cost pressures on MEK plants have slightly alleviated, the industry remains in a loss-making position. This supports a gradual upward movement in prices, with East China negotiated prices once again breaking through the 9,000 RMB/ton threshold. Meanwhile, demand-side performance remained lukewarm; terminal factories continued to purchase primarily during dips, showing caution in following high prices, resulting in insufficient substantive volume increases.
2. Loose Supply-Demand Landscape Fails to Boost the Market
From a fundamental perspective, the current supply-demand landscape for MEK is generally loose. Within the month, some production units increased their operating loads, leading to a slight growth in MEK supply and ample spot market availability. On the demand side, no significant improvement was observed; terminal factories mainly consumed previous inventories, with moderate enthusiasm for new orders. Lacking substantive demand stimulation, the supply-demand fundamentals struggle to provide effective support for the MEK market, leaving insufficient driving force for sustained price increases.
3. Industry Under Pressure as Profit Margins Continue to Narrow
Under the dual squeeze of persistently high raw material prices and poor pass-through of product price increases, theoretical profit margins in the MEK industry continue to narrow. Although MEK plant quotes have been raised, constrained by weak follow-through from the demand side, actual transactions consist mostly of small, rigid-demand orders. The price increases cannot fully cover the rise in raw material costs, further compressing overall profitability. If post-ether C4 raw materials remain high while terminal demand fails to see substantive improvement, the low-profit scenario in the MEK industry may persist.
4. Market Outlook
Cost Perspective: Currently, the Shandong post-ether market faces tight supply, and competing products in the civilian market are running at high levels, providing certain bottom-line support for the market. However, after two consecutive days of price rebounds, the bullish support from fundamentals and news has been largely realized. Downstream price increases have lagged significantly, and terminal rigid demand follow-through is insufficient. In the short term, bullish and bearish factors are balanced, lacking breakthrough variables, so prices are expected to fluctuate repeatedly around 7,400–7,500 RMB/ton. Cost support for MEK remains intact.
Supply Side: Industry operating loads show limited fluctuation, with overall supply remaining ample. Additionally, there are expectations for new capacity releases. If these come online as scheduled, they will further increase market supply pressure, which warrants close attention.
Demand Side: As temperatures drop in northern regions, overall demand in traditional downstream sectors such as coatings and adhesives is weakening month-over-month. Downstream factories are primarily placing small rigid-demand orders and scheduling production based on orders, with slower procurement rhythms and continued resistance to high-priced goods. Regarding exports, despite clear advantages in domestic-international price spreads allowing exports to divert and support domestic supply, incremental new orders are limited.
In summary, constrained by loose supply and weak demand, the price center is likely to maintain range-bound fluctuations. While occasional rebounds are expected, a trend reversal is unlikely. Going forward, changes in the international economic environment, export order pacing, and the recovery of domestic demand will be key variables influencing the market.
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