In July, the domestic MIBK spot market traced a V-shaped trajectory, initially declining before rebounding. At the start of the month, the benchmark spot price in East China stood at 9,466.67 RMB/ton; however, weighed down by weak off-season demand, ample supply, and insufficient cost support, the price fell steadily to a monthly low of 8,700 RMB/ton on July 14. Driven by rising prices for the feedstock acetone, the market bottomed out and recovered mid-month, with the price climbing back to 9,450 RMB/ton by month-end—effectively recouping earlier losses. Nevertheless, constrained by downstream demand, the recovery was merely corrective in nature rather than signaling a sustained upward trend.
First, downstream demand has entered the traditional off-season; operating rates in sectors such as tire additives (antioxidants) and coatings have declined, with end-users purchasing only to meet immediate needs rather than engaging in bulk restocking, resulting in sluggish trading and a lack of transaction support. Second, domestic production units are operating stably and market supply is ample; traders face significant pressure to destock and are actively lowering prices to move inventory, thereby intensifying the downward price trend. Third, the upstream acetone market is weak, undermining the cost floor for MIBK; manufacturers lack the resolve to hold firm on prices, and market sentiment is dominated by pessimism.
The primary driver was a sharp surge in the price of the feedstock acetone, which significantly raised MIBK production costs—squeezing industry margins and even causing losses—thereby prompting manufacturers to withhold supply and hold firm on prices, effectively reversing the market's previous weakness. Meanwhile, as prices hit yearly lows, traders and downstream buyers stepped in to restock at bargain levels; this led to a recovery in trading activity and market sentiment, decisively ending the bearish trend and driving a steady upward price correction.
This round of price rebounds is driven purely by costs rather than a trend reversal fueled by a recovery in demand. With the downstream sector remaining in the off-season at month-end, end-users are cautious about purchasing at higher prices, limiting the growth in transaction volumes. Furthermore, the industry's loose supply landscape remains fundamentally unchanged—lacking the support of supply shortages—which constrains the magnitude of the rebound and results in a market characterized primarily by fluctuating consolidation.
From the perspective of SunSirs, cost remains the core pricing driver for the market in the short term. Key factors to monitor include acetone price trends, operating rate fluctuations at MIBK plants, the recovery of downstream operating rates, and changes in port inventory levels. Additionally, attention should be paid to the strength of the basis and potential breakouts above technical resistance levels to assess the sustainability of any market rebound and identify turning points in market sentiment.
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