Asia MIBK sentiment mixed on feedstock uptrend, demand lull

Author: Angeline Soh

2019/09/10

SINGAPORE (ICIS)--Asia’s methyl isobutyl ketone (MIBK) sentiment remains mixed as feedstock prices keep rising amid a demand lull.

In Q3, demand is typically weak across Asia. In China, the summer weighs on the demand while in India and southeast Asia, the monsoon lull impedes trades. Downstream rubber tyre and marine paint and coating consumption is typically lowered in Q3.

A container ship at Nansha Port in China. (Source: Xinhua/REX/Shutterstock)

For Chinese import sentiment, the sluggish demand is offset by the persistent rise in feedstock acetone prices.

In the week ended 6 September, acetone prices were assessed at $440-460/tonne cost and freight (CFR) China Main Port (CMP, up by $5/tonne on the high end, and marking a near 30% rise within a month.

Offers and selling ideas had to be raised, in order to protect margins.

Selling ideas for northeast Asia-origin cargoes were at $890-960/tonne CFR CMP, against buying ideas below $850/tonne CFR CMP.

In the week ended 3 September, MIBK import prices were assessed at $835-855/tonne CFR CMP, stable week on week.

Offers for domestic MIBK were at Chinese yuan (CNY)7,200-7,500/tonne ex-tank against transaction levels were CNY7,000/tonne ex-tank.

In the week ended 3 September, MIBK domestic prices were assessed stable at CNY7,000/tonne ex-tank.

Outside of China, India’s domestic prices were at India rupee (Rs) 59/kg ex-tank, as compared with Rs57/kg ex-tank week on week. The domestic sentiment was bolstered by the rise in feedstock acetone domestic prices at Rs43/kg ex-tank Kandla, up by Rs2/kg on the low end in the week ended 4 September.

MIBK import discussion levels remained at $800-810/tonne CFR India, alongside import acetone prices which were stable at $425-480/tonne CFR India in the week ended 4 September.

Discussion levels in southeast Asia emerged at a wider range.

Northeast Asia-origin cargoes were offered at $850-870/tonne CFR SE Asia.

Deep-sea origin cargoes were heard offered at $770/tonne CFR SE Asia.

Buying ideas were at $750-810/tonne CFR SE Asia.

In the week ended 3 September, MIBK prices were assessed at $800-850/tonne CFR SE Asia.

“We don’t expect a lot of activities before the 70th anniversary (in China), even in India and southeast Asia, since the demand is still bad due to the weather,” said a southeast Asia-based trader.

Focus article by Angeline Soh