Introduction: The MIBK market recently exhibited a pattern of initial gains followed by declines. As of September 17, the East China price stood at RMB 13,600/ton. This trend was primarily driven by shifts in cost dynamics, which influenced supplier sentiment and caused MIBK prices to follow the trajectory of its key raw material, acetone, transitioning from upward momentum to downward pressure.
Cost Factors: Acetone Prices Rose Then Fell, Weakening Cost Support
The recent turning point in the MIBK market’s price movement was fundamentally driven by changes in acetone prices. Last Friday, the acetone market surged significantly, directly increasing MIBK production costs and creating a bullish atmosphere within the industry. Producers raised their quoted prices accordingly, while suppliers became reluctant to sell, leading to a temporarily strong market performance. However, entering the mid-to-late part of the month, the acetone market rapidly reversed course, with prices falling below RMB 9,000/ton. This collapse in cost support weakened holder sentiment, prompting sellers to lower their offers. Consequently, the market center shifted from firm to weak. Overall, cost factors played a dual role in this period, first pushing prices up and then dragging them down.
Supply Factors: Supplier Reluctance to Sell Shifts to Softening Sentiment
MIBK operating rates have recently fluctuated around 49%. In the earlier phase, buoyed by rising acetone prices, producers increased their quotations, and supplier reluctance to sell was pronounced. This limited spot availability provided some support to prices. However, as raw material acetone prices declined and cost support weakened, supplier sentiment softened noticeably, with some holders choosing to offer discounts to move inventory.
Demand Factors: Lackluster Essential Demand and Resistance to High Prices
The demand side has been the critical constraint preventing sustained price increases for MIBK. While earlier rises in raw material costs drove MIBK prices higher, downstream users showed low acceptance of these elevated levels. Essential demand remained limited, with few actual transactions occurring, resulting in a "high quotes but no volume" scenario. Even after MIBK prices retreated, downstream purchasing intent did not improve significantly. Essential demand remains sparse, trading activity is subdued, and weak demand fails to provide effective support for prices.
Market Outlook
In summary, if raw material acetone continues to weaken or remains volatile without significant upside, the cost-driven momentum will dissipate, likely keeping the MIBK market under continued pressure. However, if downstream essential demand sees phased restocking, the downtrend may slow. Future attention should focus on acetone price trends and changes in downstream procurement rhythms.
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