MIBK Market Under Pressure Amid Falling Replacement Costs and Ample Supply

Key Highlights:

• MIBK prices fall ₹1/kg amid high inventories and weak demand
• Traders offer aggressive discounts to clear stock 
• Paints and packaging sector demand remains sluggish
• Deepak Phenolics to start MIBK production by Q3 FY25

Price Trend & Market Sentiment

MIBK prices slipped by ₹1/kg this week, with bulk offers now seen at ₹97++/kg ex-Kandla.

Traders were offering material at ₹99++/kg ex-Kandla on 60-day payment terms.

On a week-on-week basis, prices fell by nearly 2%, mainly due to weak downstream demand, high inventory levels at Indian ports, and lower replacement costs.

Demand and Supply Overview

The MIBK market remains under pressure amid elevated port stocks, softening feedstock acetone prices, and cheaper import replacement values.

These factors have prompted importers and traders to adopt aggressive selling strategies in an attempt to liquidate inventories.

Rubber manufacturers, one of the primary consumer segments, expect further price correction as production rates remain low, according to market sources.

Falling upstream crude oil and natural gas prices have also added to the bearish outlook. Buyers from the packaging and ink sectors anticipate further price reductions, driven by weak end-use demand.

India’s monthly MIBK consumption is estimated at 4.1–4.25 Kilo Tons, and is entirely met through imports. However, Deepak Phenolics has entered the MIBK trade, with commercial production expected to begin by Q3 2025—a move that is likely to reshape domestic supply dynamics in the near future.

Key end-use segments include bulk drugs, rubber chemicals, flavours and fragrances, as well as paints and coatings.

While demand from the paints and coatings sector stayed weak in June and is likely to remain subdued in July due to the monsoon season, there are signs of recovery in the bulk drug and rubber chemicals sectors, which could help stabilise the market.

Market News: Industry Updates & Key Developments

In global markets, crude oil (WTI) prices fell by 0.40% to close at $66.71/bbl. Natural gas prices also declined by 1.58%, settling at $3.41/MMBtu.

In Asia, FOB Korea benzene prices were assessed at $724/MT, while FOB Korea propylene was at $790/MT.

MIBK FOB China prices were recorded at $988/MT.

Expert Option and Market Outlook 

MIBK prices are likely to show mixed trends in the coming week. While overall sentiment stays bearish due to high inventories and weaker replacement costs, a pickup in demand from the bulk drug and rubber chemicals sectors could offer some short-term support.

Buyers are recommended to follow a just-in-time procurement strategy and avoid building up inventory, as prices may continue to show weakness in the near term.