MIBK Prices Slide in India as Imports and Inventory Surplus Weigh on Market

Key Highlights

• Price Drop: MIBK prices fell by INR 2/kg due to liquidation pressure and bearish market sentiment.
• Supply & Demand Dynamics: High inventory levels and weak demand from bulk drugs and rubber sectors continue to push prices down.
• Market Updates: Global crude oil and feedstock prices declined, impacting cost dynamics.
• Expert Outlook: Prices may stay volatile; just-in-time purchasing is recommended to avoid exposure to further declines.

MIBK Price Trends: Market Correction Amid Weak Demand

• MIBK prices witnessed a decline today, as importers lowered their offers by INR 2/kg. Current quotations stand at INR 123++/kg on an ex-Hazira basis and INR 124++/kg ex-Kandla for 60-day credit terms.
• Traders holding stocks are offering slightly lower rates, quoting INR 122++/kg ex-Kandla and INR 123++/kg ex-Hazira for advance payments. This downward trend is driven by liquidation pressures and expectations of further price corrections.
• The price drop is primarily attributed to weak downstream demand, surplus inventories at ports, and lower replacement costs, fostering bearish market sentiments in the short term, as per traders.

Supply & Demand Outlook: Inventory Pressure Weighs on Prices

• Despite seasonal factors that generally support higher demand, MIBK prices remain under pressure due to high inventory levels at ports and reduced replacement costs, pulling prices downward. Importers and traders are actively focusing on liquidating stocks, as buyers delay purchases in anticipation of further price reductions.
• India’s monthly MIBK demand is estimated at around 4.1 to 4.25 KT, entirely met through imports. Speculation is growing regarding Deepak Phenolics' potential entry into the MIBK production segment, with production expected to commence in Q3 2025. Market observers suggest this could impact supply dynamics in the near future.
• Key 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 industries remained sluggish in February and is expected to stay weak in March 2025 due to subdued downstream activity, the paints and coatings sector continues to show resilience, offering some support to the market.

Global Market Updates: Crude, Feedstock, and Import Trends

• On the global front, crude oil (WTI) prices declined by 1.21%, settling at $67.43 per barrel. Natural gas prices also dropped by 2.27% to $4.25/MMBtu. FOB Korea benzene prices were recorded at $858/MT, while FOB Korea propylene was assessed at $820/MT. Feedstock CFR China acetone prices stood at $780/MT.
• Offers for CIF India MIBK cargoes for April were reported in the range of $1,375–1,400 per MT, depending on volume and payment terms.

Expert Insights: Navigating a Bearish Market Sentiment

• MIBK prices are expected to show mixed trends this week, influenced by weak market sentiment, high port inventories, and lower replacement costs. However, strong demand from the paints and coatings sector is likely to offer some price stability. 
• Buyers are advised to follow a just-in-time procurement strategy and refrain from stockpiling, as market sentiments remain bearish.