MIBK Prices Decline Amid Stock Liquidation and Weakening Feedstock Costs
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MIBK prices saw a downward trend today, with importers reducing their offers by INR 2/kg. Current quotations stand at INR 140++/kg on an ex-Hazira and ex-Kandla basis for 60-day credit terms. Traders holding stock offer slightly lower prices, quoting INR 138++/kg ex-Kandla and INR 138.50++/kg ex-Hazira for advance payments.
Chemical Price
- MIBK prices saw a downward trend today, with importers reducing their offers by INR 2/kg. Current quotations stand at INR 140++/kg on an ex-Hazira and ex-Kandla basis for 60-day credit terms.
- Traders holding stock are offering slightly lower prices, quoting INR 138++/kg ex-Kandla and INR 138.50++/kg ex-Hazira for advance payments, driven by liquidation pressure and expectations of further price corrections.
- Interest in bulk deals has surfaced around the INR 135++/kg level ex-Hazira, as reported by a leading bulk buyer.
- The price decline is mainly attributed to falling acetone prices, lower replacement costs, and a substantial build-up of inventory at ports, according to market sources.
- Buyers are currently adopting a “just-in-time” procurement strategy, anticipating further reductions as upstream crude oil and feedstock prices in China continue to weaken.
Chemical Demand and Supply
- Despite seasonal factors that typically favour higher demand, MIBK prices are under pressure due to large inventory volumes at ports, declining acetone prices, and lower replacement costs. Importers and traders are increasingly focused on liquidating stocks as buyers delay purchases in anticipation of further price drops.
- India’s monthly demand for MIBK is estimated at around 3.1 to 3.5 KT, with imports entirely fulfilling this requirement. Speculation surrounds the potential entry of Deepak Phenolics into the MIBK production market, with output expected to commence in Q3. This could impact market trends in the near future.
- The major end-use sectors for MIBK include bulk drugs, rubber, flavours and fragrances, and paints and coatings. While demand from the bulk drug and rubber processing sectors remains robust due to seasonal demand, the paints and coatings segment is experiencing sluggish demand due to off-season factors. However, the situation is expected to improve after September.
Chemical News
- On the global front, crude oil (WTI) prices rose by 1.63%, reaching $71.51 per barrel. Natural gas prices also increased by 1.35%, to $2.64/MMBtu.
- FOB Korea benzene prices were reported at $946/MT, while FOB Korea propylene was assessed at $815/MT.
- Feedstock CFR China acetone prices stood at $930/MT. Offers for downstream MIBK cargoes expected to arrive by the end of September are quoted in the range of $1,460 to $1,560/MT, depending on volume and payment terms.
Expert Opinion
MIBK prices are likely to exhibit mixed trends this week due to weak market sentiment, high port inventories, and lower replacement costs. However, strong demand from the rubber processing and bulk drug sectors could lend some support in the short term. Buyers are advised to stick to just-in-time procurement strategies and avoid building inventory, as a reversal in market trends may not be imminent.
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