Methyl Ethyl Ketone (MEK) prices experienced downward pressure across global markets during early December, driven by weak demand and ample supply. In Asia, oversupply from domestic producers and muted procurement activity from industries such as paints, coatings, and adhesives kept prices subdued. Similar bearish trends were observed in Europe and the USA, where a construction sector slowdown further dampened MEK consumption.

In Asia, particularly China, the MEK market faced a pronounced supply-demand imbalance, driven by a surge in domestic production and persistently weak consumption. The commissioning of new plants in South China significantly expanded supply, with production capacities climbing to 260,000 tons/year, a dramatic rise compared to 40,000 tons/year in the same period of 2022.  Downstream industries like glass glue and ink exhibited weak procurement, with buyers maintaining minimal inventory to avoid price risks. Intensified competition among domestic producers, particularly those in East and South China leveraging cost advantages, added further strain to the market. As downstream factories operate with lean inventories and end-use industries struggle to regain momentum, the MEK market is expected to face prolonged challenges, with supply far exceeding demand and no immediate recovery in sight.

The weak market sentiment stemmed from reduced demand in the paints and coatings sector, especially in Europe, where construction activity continues to decelerate. Recent data highlights that overall construction production in the EU experienced a decline, with building construction output shrinking month-on-month. This decline amplified already low procurement volumes for MEK, exacerbating supply overhangs in global markets. Asian producers, facing excess inventory, heightened competition in export markets, further pressuring prices. Additionally, falling feedstock butanol costs reduced production costs for MEK, but this offered limited relief as demand from both domestic and export sectors remained muted.

In the USA, demand for MEK remains particularly weak, reflecting struggles in the housing and construction sectors. According to the Commerce Department, New home sales have dropped significantly, with inventories reaching their highest levels in over a decade, underlining the excess supply in the market. Rising mortgage rates and natural disasters have further hindered construction activity, a key driver of demand for MEK in paints, coatings, and adhesives. Broader economic uncertainties, including inflationary pressures and tariff concerns, have contributed to a pessimistic market outlook.

As the year-end approaches, manufacturers face mounting pressure to clear inventory, prompting targeted discount strategies to mitigate financial strain and align supply with prevailing demand. According to ChemAnalyst, these measures, coupled with oversupply and low downstream activity, are likely to drive MEK prices lower in the near term, perpetuating bearish market conditions into early 2025.