Indian MEK Market Sees Price Correction on Lower Replacement Costs

Key Highlights:

1. MEK Prices Decline Due to Weak Market Sentiment – Importers reduced MEK prices by INR 2/kg, with traders quoting INR 124/kg (Ex-Kandla) for immediate dispatch.
2. Financial Year-End Slows Demand in Paints & Coatings – Buyers remain inactive, causing short-term demand weakness. Post-March recovery is expected.
3. Inventory Levels Remain High Amid Continuous Imports – India’s ports hold moderate inventory, with bulk buyers expecting further price corrections.
4. Global Market Trends Show Mixed Signals – Crude oil and natural gas prices declined slightly, while CIF India MEK offers ranged between $990 and $1,025/MT.

MEK Prices Decline Amid Weak Buying Interest 

• Importers have reduced Methyl Ethyl Ketone (MEK) prices by INR 2/kg, bringing the current price to INR 123/kg (Ex-Kandla) on a 60-day credit basis. 
• Authorized dealers of domestic producer Cetex Petrochemicals Ltd. are offering MEK at INR 118/kg (Ex-Chennai) for advance payments and INR 120/kg on 60-day credit terms.
• Traders are quoting INR 124/kg (Ex-Kandla) for immediate dispatch on an advance payment basis.
• Bulk buying interest remains subdued below the INR 120/kg level, as replacement costs for incoming vessels are significantly lower.
• The price reduction is primarily attributed to weak market sentiment, with the majority of buyers remaining inactive due to the financial year closing.

Financial Year-End Slows Down MEK Demand 

• MEK is predominantly used in industries such as printing inks, packaging, paints, coatings, adhesives, and pharmaceuticals. In February, demand from the pharmaceutical, printing inks, and packaging sectors remained moderate. However, demand from the paints and coatings segment has fallen short of expectations this month, largely due to the financial year-end in March 2025.
• Inventory levels at Indian ports are moderate, supported by regular vessel arrivals. Upstream natural gas prices, which had reached a two-year high, have undergone price corrections this week. MEK prices are expected to recover post-March 2025, as demand from the paints and coatings sector is likely to improve with the onset of the new season.
• However, bulk buyers anticipate a sharp price correction, given the high inventory levels at ports due to continuous vessel arrivals.
• India’s monthly MEK demand stands at approximately 2,500 metric tons. Cetex Petrochemicals Ltd., the sole domestic producer, has a production capacity of 1,600 metric tons per month, while the remaining 1,000 metric tons are fulfilled through imports.

Global Market Trends and Price Indicators 

• In the global market, the upstream crude oil benchmark WTI saw a marginal decline of 0.04%, settling at $67.65 per barrel. 
• Feedstock natural gas prices also dropped by 0.54% to $4.06/MMBtu. 
• Meanwhile, CIF India offers for MEK from China for end-March arrivals are quoted between $990 and $1,025 per metric ton.

Expert Outlook: Short-Term Pressure, Long-Term Recovery

• Market trends suggest that MEK prices will remain mixed in the short term, weighed down by surplus inventory at ports and an overall bearish market sentiment.
• However, strong demand from the printing inks and packaging sectors is expected to provide some upward support for MEK prices in the near future.