Solvents markets in 2025 appeared generally bearish, driven primarily by slower-than-expected demand. Tariffs and broad economic uncertainty affected most sectors, and end users continued to purchase only as needed, rather than maintaining inventories. Despite a slight interest-rate reduction from the U.S. Federal Reserve, demand is not expected to improve in the first half of 2026. Although real estate values are declining in some markets, the cost of new construction remains elevated due to tariff-driven increases in material costs.
Isopropyl Alcohol (IPA)
Most North American producers curtailed operating rates in 2025 in response to slow demand. While no producer publicly confirmed operating rates, they were widely believed to be near or below 70 percent. Tech-grade IPA demand remained soft throughout the year, showing little pickup even during the coatings season. Demand tied to gas and oil production was somewhat more stable but still far from strong.
In contrast, USP and electronic-grade IPA performed well, with electronic-grade demand particularly strong due to the construction of new microchip processing plants in the United States. ExxonMobil is expanding IPA capacity at its Baton Rouge site to produce electronic-grade material domestically, a notable move given that the current U.S. supply of electronic-grade IPA is entirely imported from Taiwan and Japan.
Methyl Ethyl Ketone (MEK)
In April, Shell shuttered its 90,000 mt/year MEK unit in Pernis. Shell reached a supply agreement with ExxonMobil to continue supplying contract customers, though details—such as whether Shell is providing feedstock—have not been confirmed. All MEK used in the United States is imported, as domestic MEK production ceased in the mid-2010s.
Prices in the United States were initially expected to rise gradually due to tighter global supply and higher import costs resulting from tariffs. Instead, prices moved higher midmonth and then mostly stabilized. Globally, supply appeared long. China has added around 40,000 metric tons per year of new capacity and now has approximately 920,000 metric tons per year of installed capacity. However, slow demand led to some older Chinese units being idled indefinitely and to reduced operating rates; through October, Chinese MEK output was reported at 513,000 mt.
In the United States, prices were mostly flat from April onward, with slight softening noted in December. Demand throughout the year was slower than expected due to tariffs and broader economic uncertainty.
Methyl Isobutyl Ketone (MIBK)
China has added roughly 150,000 metric tons per year of new MIBK capacity since 2024, influencing global trade flows. U.S. suppliers—such as Altivia—historically exported MIBK to Asia and Europe, but export activity has slowed significantly as new Chinese capacity enters those same markets.
Demand in the United States was slow in 2025, largely due to an uneventful coatings season. Global supply also appeared long. Even with reported operating-rate reductions in the United States, markets remained long throughout 2025. It is likely that production will be further scaled back in 2026 to reflect increasing global competition.
Ashley Rock
ResourceWise: Jan 15, 2026 2:26:37 PM
