May MIBK Market Weakens and Moves Narrowly Lower; Downward Momentum Slows at Month’s End

May 29th News

In May, the Chinese MIBK spot market as a whole showed a weak and narrow downward trend. The market lacked significant rebound momentum, with prices fluctuating and declining slightly. The volatility for the entire month was limited, and there was no substantial one-sided decline, which is consistent with the characteristics of a weak operation during the off-season in the solvent industry.

According to price monitoring data, the benchmark price of MIBK in China at the beginning of May was 12,266.67 CNY/ton, and by May 26th, it had dropped to 11,833.33 CNY/ton, with a cumulative monthly price decrease of 3.53%. As the 10-day moving average continued to run below the 20-day moving average, the moving averages were in a bearish arrangement, clearly indicating a weak market. In the late month, there was a marginal change in the market trend, with the negative difference between the 10-day and 20-day moving averages gradually narrowing. On May 28th, the difference between the averages fell to -136.67 CNY/ton, indicating a significant slowdown in the market's downward trend, and initial signals of a turning point for short-term stabilization.

Downstream demand remains weak, with insufficient follow-up from rigid demand. The demand side is the core factor dragging down the MIBK market this month. MIBK is mainly used in coatings, inks, adhesives, and rubber anti-aging agents. May is traditionally the off-season for chemical solvents, and the operating rates of terminal industries such as coatings, furniture manufacturing, and printing remain low. Downstream factories generally adhere to a strategy of purchasing on demand and taking what they need, showing very little willingness to stock up in large quantities. Market intermediaries show little interest in replenishing their stocks, and traders are mainly focused on clearing their existing inventories. The trading atmosphere in the market is subdued, with weak support from rigid demand, making it difficult to drive a recovery in spot prices.

The price of raw material acetone has decreased, and cost support has weakened. The negative impact from the raw material side continues to be transmitted, with the market for MIBK's key raw material, acetone, continuously declining. Acetone manufacturers in many regions of China have successively lowered their ex-factory quotes, causing the raw material cost line to continually shift downward, slightly restoring profit margins for the production end. With the loss of strong support on the cost side, MIBK producers have lost the confidence to maintain prices. Coupled with the pressure of spot sales, manufacturers have proactively reduced their ex-factory quotes to sell at a discount, further driving the spot market prices to follow the downward trend.

The overall supply in the industry remains stable, with a continued pattern of loose supply and demand. On the supply side, in May, the main MIBK production facilities in China operated smoothly. Leading companies such as Wanhua Chemical, Balin Petrochemical, and Jianye Chemical maintained normal facility utilization rates. The overall supply of goods in the industry is adequate, with no shortages caused by concentrated maintenance or widespread production cuts. Currently, the overall supply and demand for MIBK in China is in a state of surplus. Coupled with the high market concentration among leading companies, the phenomenon of competitive pricing for sales has slightly intensified, suppressing the room for market price recovery.

In the first ten days of June, the Chinese MIBK market is unlikely to escape the weak fundamental pattern, but the room for a significant decline is limited. It is highly likely to enter a phase of bottom consolidation. The off-season for the end-user downstream industries has not yet fully ended, and overall demand is unlikely to see a substantial recovery. The lack of rigid demand will continue to suppress market conditions. The expectation of raw material prices stabilizing at the bottom is increasing, with cost support slowly recovering. Additionally, low-priced goods in the market are scarce, and manufacturers' willingness to hold prices firm has increased.

In summary, the MIBK market in China was mainly affected by the low demand season throughout May, coupled with the dual pressures of declining raw material prices and ample supply. The overall trend remained weak with a slight downward movement, and the price decrease was moderate without any extreme fluctuations. By the end of the month, the negative factors had been fully reflected, and although the market remains weak in the short term, the downward space is limited. The market is about to enter a bottom consolidation period, and the focus will be on tracking the price trend of raw material acetone and the recovery of the coatings industry.