Market Overview: Cost support failed, downward trend continued (December 1-10)

According to monitoring by the SunSirs commodity price analysis system, as of December 10th, the average price of industrial-grade dimethyl carbonate in China was 4,400 RMB/ton, a decrease of 2.58% compared to the beginning of the month. The dimethyl carbonate (DMC) market recently shown a clear downward trend. Affected by changes in the supply and demand structure, major manufacturers generally lowered their prices. The increase in raw material prices had not been effectively passed on to the product end, resulting in a divergence where "costs rise, but product prices fall."

Supply-side pressure increased

In the early stages, some parking or load reduction devices were gradually restarted, leading to a recovery in the overall industry operating rate and a loosening of market spot supply. This supply recovery was one of the main drivers of price pressure, intensifying competition among sellers. Driven by companies' strong willingness to ship goods and their strategy of actively lowering prices to reduce inventory, quoted prices continued to fall, significantly compressing corporate profit margins.

Demand recovery fell short of expectations

Downstream sectors, such as polycarbonate (PC), had not yet seen a significant increase in centralized purchasing. Companies were generally adopting a wait-and-see approach, maintaining only small, as-needed orders, and waiting for a substantial recovery in demand from end-use applications.

The cost pass-through mechanism was blocked

As of December 10th, the benchmark price for propylene oxide, according to SunSirs, was 8,166.67 RMB/ton, a 2.94% increase compared to the beginning of the month. Despite the price increase of raw materials such as propylene oxide, the abundant supply and demand situation made it difficult for upstream costs to be effectively passed on to downstream buyers, reflecting the market power shifting towards buyers.

Market Outlook: Supply and demand factors outweigh cost factors; the market is generally stable with minor fluctuations

The dimethyl carbonate market was in an adjustment phase dominated by "supply recovery and sluggish demand." In the short term, there is limited room for price declines, but also insufficient momentum for price increases. Therefore, the market is expected to exhibit a pattern of "overall stability with minor fluctuations and narrow price ranges."

Major trend: The prices were approaching the cost lines of some companies, making further sharp declines more difficult, and the market is gradually bottoming out;

Minor fluctuations: Supply and demand dynamics continued, and to promote sales, some prices may still see slight concessions.

Whether the market can stabilize and rebound depends on the following factors: whether there will be voluntary production cuts on the supply side to balance the oversupply pressure; and whether downstream demand will see a seasonal improvement or a recovery in end-consumer spending, driving inventory replenishment across the supply chain.

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