[Introduction] Since mid-May, the domestic methyl ethyl ketone (MEK) market has shown a unilateral downward trend, with the spot price in East China dropping from 10,800 yuan/ton at the beginning of the month to 8,350 yuan/ton by the end of the month, a decline of 22.7%. Primarily constrained by weak demand, new orders in the market struggled to see volume, and transactions between producers and buyers were mostly conducted through price negotiations. Prices entered an accelerated decline, and market activity significantly decreased.

I. MEK market shows a unilateral downward trend

Entering mid-May, production plants gradually faced order-taking pressure, with flexibility for price concessions expanding. Holders became cautious. Although port inventories continued to decline, persistent weakness in end-user demand, coupled with the impact of low-priced supplies from external sources, dampened market confidence, leading to a slight, gradual decline in prices. In the latter part of the month, leading producers proactively reduced quotations to drive transactions, further suppressing market sentiment. Downstream buyers generally held bearish views and showed low enthusiasm for entering the market, resulting in a stalemate characterized by price declines without volume and offers without actual transactions.

II. Phased analysis of price trends: three-stage collapse driven by sentiment

1. Early month: Prices stabilized at high levels. After the May Day holiday, new orders were acceptable, production and sales pressures on plants were minimal, and port inventories remained tight, with firm offers overall. Market participants were cautiously optimistic, but high-priced transactions lacked follow-through, and trading sentiment was subdued.

2. Mid-month: Downward pressure emerged. Plants faced order-taking pressure, price concessions increased, end-user demand continued to weaken, and low-priced external supplies impacted the market. Participants' confidence faltered, prices edged down slightly, and the trading center of gravity gradually moved lower.

3. Late month: Accelerated bottom-finding. Leading producers proactively lowered quotations to stimulate transactions. Downstream buyers generally held bearish views and showed low willingness to enter the market. The market entered a state of declining prices without volume and offers without actual deals.

III. Supply-demand fundamentals analysis: stable supply vs. collapsing demand

In May, MEK market supply saw little fluctuation, but demand dropped sharply, leading to a gradual imbalance in market supply and demand. Currently, industry capacity utilization remains high, but downstream purchasing intentions have plummeted. Export order inquiries have weakened, further amplifying pressure on domestic trade, resulting in sluggish new order follow-up for plants. As the difficulty in offloading goods increased, industry inventories faced the risk of accumulation, further intensifying the supply-demand contradiction and pushing market prices downward under pressure.

IV. Lack of market confidence, short-term reversal momentum absent

In May, the MEK market transitioned from high-level consolidation to accelerated bottom-finding. The collapse in demand triggered price declines. Plants' price concessions compressed margins, further weakening demand. Market confidence is lacking, and there is no short-term momentum for a reversal. The current price decline is no longer a simple matter of supply-demand adjustment. Without significant positive catalysts, the market is likely to continue a weak consolidation trend in June, with the center of gravity moving lower. In the long run, close attention must still be paid to changes in the international economic situation, the pace of export order placement, and the actual recovery of domestic demand. These will be key variables in judging market trends.