International market trend for MIBK influences Indian prices amid moderate demand – 24 Mar 2014

The bulk prices of MIBK (Methyl Isobutyl Ketone) have dwindled by Rs. 4- 5 per kg within the past couple of weeks in the Indian markets. India is completely reliant on imports to fulfill its demand for the chemical, thereby in order to get a comprehensive picture on the market dynamics, Indianpetrochem spoke to prominent importers in the market in this market review.

The Ex- Kandla prices for MIBK were around Rs. 134 per kg in the last week of February, there onward the price declined to Rs. 132 per kg in the first week of March. In line with this downward price trend, the prices moved from Rs. 131 per kg to Rs. 130 per kg in the second week of March. Presently, the market prices for the chemical are in the range of Rs. 129- 130 per kg Ex-Kandla.

According to the websites conversation with a prominent Mumbai based importer, the bulk prices have moved down due to strengthening in the rupee and weak international market dynamics; whereby huge stocks inventories and weak global demand has resulted in downward price moment of Indian booking price for the chemical.

"The Indian booking price for MIBK declined from $ 2,000 metric tonne CIF to current levels of $1,850- 1,900 CIF, due to softening international demand", another importer told the website.

While the prices have pulled down within the past few weeks, the demand for the chemical has been "stable to weak" in the country. In India, MIBK is mainly used as a solvent in the Pharmaceutical and rubber chemical industry, whereby the demand from theses industries has been moderate.

"MIBK is easily substitutable as a solvent in the ink and paint industry with other chemicals like Ethyl Acetate and Butyl Acetate, hence the demand for the chemical is automatically curbed when the prices reach significant levels", an industry official added about the usage of the chemical.

Overall, market participants anticipate that the demand growth for MIBK isn't like to immediately gain any momentum in the near term, however in the long run, within six months or so, there is a positive outlook on the demand traction for the chemical in India.

As a consequence of weak international and domestic prices the import uptakes for MIBK to India has been weak since the beginning of the year. meanwhile, there are some industry experts who feel that the current price decline is appropriate price correction for the chemical in the Indian market; this in return would push demand in the future.