[Intro] Starting from mid-May, the domestic methyl ethyl ketone (MEK) market exhibited a unilateral downward trend, primarily driven by the combined effect of high supply, weak demand, and sluggish exports. The market went through three phases: stand-off with no actual transactions, accelerated bottom-finding, and stabilization at a low level. After the concentrated release of pessimistic sentiment, MEK prices have now approached the cost line. Intermediaries' willingness to restock has increased, and the MEK market has successfully bottomed out and seen a slight rebound.

I. Review of MEK Market Price Trends by Phase

Table 1: Phase-specific Analysis of the MEK Market (Unit: RMB/ton)

| Time Point | Price | MoM Change | Phase Characteristics |
| :--- | :--- | :--- | :--- |
| Early May | 10800 | - | Stable at high levels, port inventory tight, light transactions |
| Mid-May | 10400 | -3.70% | Declining under pressure, factory order-taking pressure apparent, room for concessions expanded |
| Late May | 9350 | -10.10% | Demand declined, market maintained low-level range-bound pattern |
| End of May | 8100 | -13.37% | Industry players offloading, prices accelerated bottom-finding |
| Early June | 7600 | -6.17% | Prices approached cost line, market entered bottoming phase and saw a slight rebound |

Data source: chempricehub

Currently, the supply-demand contradiction in the MEK market is widening. While industry operating rates remain high, domestic demand is showing a shrinking trend due to declining prosperity across various downstream industries. Although export volumes in April reached a new high for the year, their role in diverting domestic supply is nearing saturation and cannot offset the immense pressure from collapsing domestic demand. Furthermore, while port spot inventory is tight, the actual circulating supply in the market is ample, further exacerbating the oversupply situation. As prices touched the cost line, intermediaries' willingness to restock significantly increased, and bottom-fishing sentiment began to rise, driving the MEK market to successfully bottom out and experience a slight rebound.

II. Demand-Side Pressure Weakens Market Transaction Sentiment

Since mid-May, the MEK market has lacked obvious positive factors to provide support, and the main reason has been the sluggish procurement willingness of end-users. Due to weak domestic demand, traditional downstream industries such as paints and adhesives have seen subdued demand. The market only maintained small-lot purchases for immediate needs, making it difficult to see a significant release in trading volumes.

From the perspective of MEK exports, China's MEK export volume in April was 36,343.83 tons, hitting a high point for the year. This was mainly because, due to the ongoing impact of the Middle East situation, some international MEK plants were operating at reduced rates due to insufficient raw material supply, highlighting China's export advantage. Production factories secured orders smoothly, leading to notable export growth. However, entering May, as domestic spot prices began a unilateral deep decline, overseas markets exhibited a "buy on rising, not on falling" mentality. Customers were strongly inclined to bid down prices, and inquiries weakened. Although factories were still fulfilling previous export orders, the significant lack of new order growth dampened market confidence. Industry players generally held a bearish view, weakening the support from the export side to the domestic market, forming a negative feedback loop of internal decline and external weakness.

III. Cautious Wait-and-See, Awaiting Demand Inflection Point

Currently, the MEK market is primarily driven by the demand side, and the price trend has deviated from the unilateral decline track, entering a period of weak equilibrium after deep adjustments. With intermediaries gradually entering the market to replenish inventory, support is forming for the bottom price, limiting further downside potential in the short term. The market is shifting from seller-dominated price negotiation to buyer-dominated price suppression. Transactions will still be dominated by small lots for immediate needs, and the impetus for building positions and hoarding stocks is insufficient. In the short term, whether MEK prices can continue to rebound will depend on the real recovery pace of end-user demand and a substantial improvement in export orders, rather than pure price speculation. It is expected that MEK prices will oscillate within the range of 7,400-7,800 RMB/ton in June.