Price trend
According to data from the SunSirs Commodity Market Analysis System, as of May 26, the average quoted price for premium-grade DMF among domestic manufacturers stood at 5,060 RMB/ton. Over the past week, the domestic DMF market has exhibited a weak pattern characterized by an initial decline followed by stabilization, a low-level stalemate, and sluggish trading activity. Prices have fallen by 12% compared to early May; with supply and demand conditions remaining loose and cost-side support proving weak, the market as a whole is under significant pressure.
Causal Analysis
Market Supply: High Operating Rates and Inventory Buildup—Prominent Supply Pressure. Last week, the DMF market saw ample supply; high operating rates, coupled with accumulating inventories, continued to exert downward pressure on prices, while regional price wars intensified. Operating rates remained at elevated levels, with the industry-wide utilization rate holding steady above 75%. Production resumed at multiple facilities that had previously undergone maintenance, and major production units—such as those in Guizhou and Anyang—operated normally. Consequently, the volume of spot goods circulating in the market continued to rise, marking a significant increase in supply.
Raw Material Costs: The core components of DMF production costs consist of methanol and liquid ammonia. Last week, raw material prices trended weakly, providing insufficient support for DMF prices and creating room for market price reductions. Methanol: Prices fluctuated at low levels throughout the week—rising initially before falling—averaging approximately 2,150 RMB/ton, representing a year-on-year decline. The downward trend in methanol prices directly lowered DMF production costs; consequently, manufacturers found ample scope to cut prices, and their willingness to hold prices firm diminished significantly. Liquid Ammonia: Prices remained stable, fluctuating within a narrow range with no significant upward or downward movement; while this exerted no additional pressure on the cost side, it also failed to provide any supportive floor. Industry Profits: As DMF prices continued their downward slide, corporate profit margins contracted markedly. Some smaller-scale plants in northern regions slipped into the red, forcing them to either cut production or temporarily halt operations; however, the impact of these actions on the overall cost landscape remained limited. In summary, the current cost structure offers insufficient protection for prevailing market prices, rendering the market prone to decline rather than growth.
Downstream Demand: Demand from core downstream industries remains sluggish, and end-market orders are insufficient. Downstream enterprises are adhering to a strategy of "low inventory and on-demand procurement"; consequently, market transactions consist primarily of small-volume orders and lack support from large-scale contracts. Operating rates are holding steady within the 70%–75% range; however, the downstream nylon and chemical fiber sectors are currently in their off-season, facing a shortage of orders. Essential demand remains stable with no incremental growth, limited to small-batch, on-demand purchases, thereby providing only limited impetus for cyclohexane demand. In the solvent sector, constraints imposed by environmental regulations have prompted some enterprises to switch to alternative products, leading to a continued contraction in demand and subdued purchasing interest. Demand from sectors such as electronics and coatings remains lackluster, showing no clear signs of recovery and failing to provide effective market support. Downstream players maintain a strong wait-and-see stance and are resistant to high prices; bulk transactions are scarce, and overall market activity remains low. The demand side is weak across the board, struggling to absorb the ample supply currently available in the market.
Market outlook
According to analysts at SunSirs, DMF prices are expected to trend narrowly lower in the short term. The current market oversupply is unlikely to ease in the near future; with downstream demand remaining lackluster, there is insufficient momentum to drive price increases. Furthermore, terminal order volumes are inadequate, resulting in a significant contraction of profit margins.
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