Market Overview: MIBK Market Enters Cold Period, Prices Fall Significantly

Recently, the trading atmosphere of MIBK (methyl isobutyl ketone) market has significantly cooled down, especially since July 15th, the MIBK market price in East China has continued to decline, dropping from the original 15250 yuan/ton to the current 10300 yuan/ton, with a cumulative decrease of 4950 yuan/ton and a decrease ratio of 32.46%. This drastic price fluctuation reflects a profound change in the market supply and demand relationship, indicating that the industry is undergoing a profound adjustment.

Reversal of supply and demand pattern: oversupply during the peak of production expansion

In 2024, as the peak period of MIBK industry expansion, the market supply capacity has significantly improved, but the growth of downstream demand has not kept up in a timely manner, leading to a shift in the overall supply and demand pattern towards oversupply. Faced with this situation, high cost enterprises in the industry have to proactively lower prices to balance the market supply pattern and reduce inventory pressure. However, even so, the market has not shown any clear signs of recovery.

Downstream demand is weak, and the support for raw material costs is weakened

Entering September, there has been no significant improvement in the demand situation of downstream industries, and most downstream enterprises only purchase raw materials based on production progress, lacking active replenishment motivation. At the same time, the price of acetone, which is the main raw material for MIBK, has continued to decline. Currently, the price of acetone in the East China market has fallen below the 6000 yuan/ton mark, hovering around 5800 yuan/ton. The decrease in raw material costs should have provided some cost support, but in the market environment of oversupply, the price drop of MIBK exceeded the decrease in raw material costs, further compressing the profit margin of the enterprise.

Market sentiment cautious, holders stabilize prices and wait and see

Affected by the dual effects of sluggish downstream demand and decreasing raw material costs, downstream enterprises have a strong wait-and-see attitude and are not actively seeking market inquiries. Although some traders have low inventory, due to the uncertain market outlook, they have no intention of restocking and choose to wait for the appropriate time to operate. As for the holders, they generally adopt a stable price strategy, relying on long-term agreement orders to maintain shipment volume, and the spot market transactions are relatively scattered.

Analysis of device situation: Stable operation, but maintenance plan affects supply

As of September 4th, the effective production capacity of the MIBK industry in China is 210000 tons, and the current operating capacity has also reached 210000 tons, with an operating rate maintained at around 55%. It is worth noting that 50000 tons of equipment in the industry are planned to be shut down for maintenance in September, which will to some extent affect market supply. However, overall, considering the stable operation of other enterprises, the supply of MIBK market is still relatively limited, making it difficult to quickly change the current supply and demand pattern.

Cost profit analysis: continuous compression of profit margins

Against the backdrop of low prices of raw material acetone, although the cost of MIBK enterprise has been reduced to a certain extent, the market price of MIBK has experienced a greater decline due to the impact of supply and demand, resulting in continuous compression of the enterprise’s profit margin. As of now, MIBK’s profit has been reduced to 269 yuan/ton, and the industry’s profit pressure has significantly increased.

Market outlook: Prices may continue to decline weakly

Looking ahead to the future, there is still a downward risk in the price of raw material acetone in the short term, and downstream enterprise demand is unlikely to show significant growth, resulting in a continued low willingness to purchase MIBK. In this context, holders will mainly rely on long-term agreement orders to maintain shipment volume, and spot market transactions are expected to remain sluggish. Therefore, it is expected that the MIBK market price will continue to decline weakly in late September, and the mainstream negotiated price range in East China may fall between 9900-10200 yuan/ton.