Price Trends

According to data from the SunSirs Commodity Market Analysis System, as of May 19, the average quoted price for premium-grade DMF among domestic manufacturers stood at 5,240 RMB per ton. The DMF market was exhibiting a downward trend; market activity has been sluggish this week, and traders are facing significant pressure to offload inventory. Despite repeatedly lowering their quoted prices in an effort to attract buyers, downstream enterprises remain reluctant to make purchases. Most downstream players have adopted a wait-and-see attitude, engaging only in small-scale, need-based procurement, resulting in a significant decline in overall market transaction volume compared to the previous week.

Root Cause Analysis

Market Supply: This week, the operating rates of domestic DMF manufacturers remained at a high level. With the resumption of production at several facilities that had previously undergone maintenance, overall market supply increased further. Operating rates at major enterprises generally exceeded 75%, resulting in continuously mounting pressure on market supply.

Raw Material Costs: The prices of DMF's primary raw materials—methanol and liquid ammonia—experienced varying degrees of fluctuation this week. Influenced by market supply-and-demand dynamics, methanol prices followed a trend of rising initially before subsequently declining; liquid ammonia prices remained relatively stable. However, from a broader perspective, the cost support provided by raw mDownstream Demand:aterials to DMF prices has shown signs of weakening.

Downstream Demand: Polyurethane Industry: Demand for DMF within the polyurethane sector remains persistently weak. The end-market furniture industry is suffering from a shortage of orders, and the slump in the real estate market has stifled growth in furniture consumption. Consequently, polyurethane manufacturers are operating at low utilization rates, leading to a marked reduction in their procurement of DMF. Leather Industry: The leather industry faces similar difficulties; the strict enforcement of environmental regulations has restricted production for some leather enterprises, resulting in reduced operating rates. Simultaneously, fierce market competition and declining leather product prices have squeezed corporate profit margins, further dampening demand for DMF. Electronics Industry: Demand for DMF from the electronics sector has shown no significant signs of recovery. The electronics market is characterized by rapid product iteration, yet current market demand is growing sluggishly; as a result, demand from this sector is unable to provide effective support for the DMF market.

Market Outlook

Analysts at SunSirs specializing in DMF believe that prices for the chemical are likely to continue their downward trend in the short term. The current market oversupply is unlikely to ease anytime soon, while downstream demand is also unlikely to see any significant improvement in the near future. Furthermore, should raw material prices continue to weaken—thereby further reducing DMF production costs—the probability of a price decline will become even greater.

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