[Introduction] Entering August, the domestic methyl ethyl ketone (MEK) market has accelerated its decline, mainly constrained by weak end-user demand. Manufacturers have seen poor new order performance, and the negotiation space for some actual transactions has widened, driving the market's trading focus to extend its downward trajectory. As of press time, the negotiated price in the Jiangsu market was referenced at 7,600–7,650 CNY/ton, down 3.48% from the beginning of the month.
I. Poor Trading Weighs on MEK Market
Since August, although the price of the raw material raffinate C4 has continued to climb, providing support on the cost side, demand-side performance has remained sluggish. Downstream buyers have only maintained small-lot purchases for rigid needs, and raw material consumption has been slow. Dragged down by this, MEK manufacturers have seen weak new order off-take, the negotiation focus for actual transactions has continued to widen, and prices have moved lower on a weak note, with overall trading volumes showing little sign of meaningful release. Meanwhile, production plants in South China have gradually resumed normal operations, intermediaries have mainly been drawing down earlier inventories, and downstream buyers have shown strong price-cutting sentiment, causing regional transaction focuses to shift lower and the price spread with the East China market to narrow further.
II. Operating Rates Rise, Supply Pattern Turns Looser
In early August, alongside the gradual restart of South China facilities, the operating rate of the domestic MEK industry edged higher, and market supply increments were released to a limited extent. However, demand has continued its weak trend. Downstream coatings and adhesives industries remain in the off-season of high temperatures, with factories only restocking in small lots for rigid needs. Their resistance to high-priced cargo is evident, and actual transaction sentiment has been sluggish. On the export front, manufacturers have mostly been executing earlier orders, with limited follow-up new orders, making it difficult to effectively divert domestic pressure. Overall, the market presents a pattern of strong supply versus weak demand. In the short term, there is a lack of substantive supportive factors, offering little impetus for prices.
III. Firm Raw Material Prices Squeeze Industry Profits
Entering August, the raw material raffinate C4 market has moved upward on a volatile note, with the transaction focus shifting notably higher. As of press time, the benchmark price of raffinate C4 in Shandong stood at 6,570 CNY/ton, up 2.34% from the beginning of the month. Currently, the Shandong market continues to see a low-supply situation from the earlier period, with manufacturers enjoying smooth sales and no inventory pressure, allowing prices to be pushed up along the trend. During this period, as geopolitical tensions showed signs of easing, international oil prices fell sharply, and bearish sentiment from the news front exerted drag, leading to a brief pullback in the raffinate C4 market. However, downstream buyers gradually returned to replenish stocks supported by rigid demand, prompting raffinate C4 prices to rebound once again and remain firm. MEK plants face considerable cost pressure, yet are constrained on the demand side, with prices moving down under pressure. Industry profit margins have continued to shrink, with the sector as a whole falling into a loss-making state.
IV. Market Outlook
In summary, the current decline in MEK prices has been primarily driven by downstream demand constraints. Although cost-side support remains robust, high prices have struggled to be effectively passed through, given the sluggish downstream end-use consumption and weak new order off-take. In the short term, the market will maintain a range-bound pattern, pressured by demand from above while underpinned by costs from below. With supply-side operating rates holding steady, spot resources remain ample. However, demand-side recovery is weak, with downstream buyers only making small-lot purchases for rigid needs. Coupled with subdued export orders, domestic demand diversion remains limited. It is expected that the market will lack single-direction upward momentum in the near term, with prices likely to consolidate at a weak bias within a range. Looking ahead, close attention should be paid to actual order follow-through and the sustainability of the raffinate C4 price uptrend; prudent trading discipline remains necessary.
Disclaimer: This article is for reference only. The information and opinions contained herein do not constitute any investment advice or recommendation for specific operations. The editors are not liable for any losses incurred by readers as a result of using the content of this article. Enterprises and relevant parties should make independent judgments based on their own circumstances and bear corresponding risks accordingly.
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