August 31 news
Price Performance
In August, the MIBK overall showed volatile upward movement with a rising center of gravity.
- The benchmark price at the beginning of the month was approximately 9,466 CNY/ton, rising to 10,216 CNY/ton by the end of the month, representing a monthly price increase of about 8%.
- East China mainstream spot: at the beginning of the month 9,700-9,800 CNY/ton, at the end of the month negotiations 10,300-10,500 CNY/ton (including tax, self-pickup)
- Trend Pace: In the first ten days, there was a tentative price increase. In the middle of the month, prices continued to rise driven by consecutive price adjustments of acetone. In the last ten days, the price increase slowed down, with high prices consolidating in a narrow range. Holders mainly maintained their prices, while downstream buyers were cautious about chasing higher prices.
- Basis Dimension: The daily average spread remains positive, with a strong short-term trend. However, it is approaching the 60-day pressure range, limiting further upside potential.
1) Cost side: Phenol continues to strengthen, forming a rigid bottom support
Acetone is the primary raw material for MIBK. In August, Chinese phenol and acetone manufacturers repeatedly raised their factory prices (Lihuayi Weiyuan, Longjiang Chemical, etc., successively increased prices), causing acetone spot prices to steadily rise. This directly increased the production cost of MIBK, forcing factories to raise their quotes. As a result, companies' losses narrowed, and their willingness to maintain higher prices significantly increased.
2) Supply Side: Local Maintenance, Tighter Availability of Circulating Supplies
The overall operation of China's main facilities is acceptable, but some supporting and smaller facilities have undergone short-term maintenance and reduced loads; import costs have increased, narrowing the arbitrage window, and the increase in arriving shipments is limited; factories prioritize long-term contract deliveries, so there is not much spot supply in the market. Inventory levels are maintained at a moderately low level, with no significant pressure for inventory accumulation.
3) Demand Side: Expectations of Traditional Peak Season, Rigid Demand for Restocking Released
The downstream industries of coatings, rubber anti-aging agents, and adhesives in China are preparing for the golden September and silver October by stocking up in advance. In the middle to late August, there was an increase in restocking by end-user factories due to rigid demand; however, as the profits in the downstream sectors are average, the willingness to chase high prices is weak, with purchases mainly based on actual needs. The demand has seen a moderate improvement but has not experienced explosive growth, leading to a gentle upward trend, presenting a situation where "costs push up prices, while demand supports but does not explode."
1. Factory: Cost-driven proactive price pushing, holding back sales to support prices; 2. Traders: Adjust offers according to market trends, quick buying and selling, and be cautious about stockpiling; 3. Downstream: Replenishing at low positions, observing at high prices, transactions are mostly based on actual demand. 4. Constraints: The limited capacity of the downstream sector in China to absorb increases restricts unilateral sharp rises, resulting in a market trend characterized by small, gradual increases and high-level fluctuations.
Technical Analysis
1. Moving Average System Since the beginning of the month, the price has risen above the 10-day and 20-day moving averages, with both lines turning upward from a flat trend to form a bullish alignment, providing support below the short-term moving average. At the end of the month, the price touched the 60-day moving average resistance level, slowing the upward momentum, and there is a possibility of a pullback to test the support of the moving averages. The difference between the 10-day and 20-day moving averages remains positive, indicating an intact bullish trend structure, but the narrowing difference suggests a marginal weakening of the short-term upward momentum. 2. Price Patterns and Ranges: In August, the market entered an upward channel with rising lows; the pullback did not break below the previous round’s low point, indicating a healthy upward structure. The key resistance zone above is in the range of 10,500–10,800 CNY/ton—a historically dense trading area. The first support level below is at 10,000 CNY/ton, with strong support at 9,500–9,600 CNY/ton. 3. Volume and Price Coordination (Trading Perspective) During the middle stage of the price increase, there is a replenishment of inventory driven by essential demand, leading to an increase in trading volume. At the end of the month, during the high-price phase, trading volume decreases, signaling a divergence between volume and price, indicating insufficient funds for further price chasing. This makes it more difficult for a unilateral price surge, and the market shifts into a high-level fluctuation mode. 4. Indicator Logic: The short-term trend indicator is relatively strong but is approaching the overbought zone. If raw material prices fail to continue rising, prices will likely consolidate at high levels to absorb profit-taking, with price fluctuations and adjustments becoming the dominant pattern. Once the price breaks below the support level of the short-term moving average, the current upward trend will weaken.
Market Outlook (September)
- Bullish factors: acetone trend, further realization of the traditional peak season for downstream demand, and plant maintenance plans; the technical bullish structure of moving averages remains intact, and the strong pattern will persist as long as support levels are not broken.
- Negative factors: After prices rise, downstream resistance intensifies, and high-price transactions become sluggish. If raw material prices ease further and prices fall below key support levels, MIBK’s upward momentum will quickly weaken.
- Forecast: A short-term strong fluctuation, with the extent of the price increase more dependent on the trend of acetone and the sustainability of downstream operations; technically, attention should be paid to whether the 100,000 level can be maintained, as holding it will keep prices at a high level, while a break below this level will lead to a weaker consolidation.
