Price trend
According to data from the SunSirs Commodity Market Analysis System, as of May 27, the average quoted price for premium-grade DMF among domestic manufacturers stood at 4,920 RMB/ton. With operating rates in the DMF market remaining stable and demand holding steady, the market as a whole is primarily undergoing a phase of consolidation.
Root Cause Analysis
Market Supply: The supply of DMF is ample; production units are operating at high loads, leading to an accumulation of inventory. The combination of high operating rates and rising stock levels continues to exert downward pressure on prices, while regional price wars have intensified. Operating rates remain elevated, with the industry-wide utilization rate holding steady above 75%. Units that had previously undergone maintenance have resumed production in concentrated fashion; key production facilities in regions such as Guizhou and Anyang are currently operating normally, though downstream demand remains insufficient.
Raw Material Costs: The core components of DMF production costs consist of methanol and liquid ammonia. This 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—with an average price of approximately 2,150 RMB/ton, representing a year-on-year decline. The downward trend in methanol prices directly lowered DMF production costs; consequently, manufacturers now have ample room to cut prices, and their willingness to hold prices firm has significantly diminished. 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 effect. Industry Profits: As DMF prices continued to slide, corporate profit margins contracted significantly. Some small-scale plants in northern regions have fallen into the red, forcing them to either cut production or temporarily shut down operations; however, the impact of these actions on the overall cost landscape remains limited. In summary, the cost line currently offers insufficient protection for current market prices, making the market prone to decline rather than rise.
Downstream Demand: Demand from core downstream industries remains sluggish, characterized by a shortage of end-market orders and cautious procurement practices. Market transactions are dominated by small-volume orders, lacking the support of substantial bulk deals. 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 insufficient orders. "Just-in-time" demand remains stable with no incremental growth, leading to procurement limited to small, need-based orders that provide only limited impetus for cyclohexane demand. In the solvent sector, constraints imposed by environmental regulations have prompted some enterprises to switch to alternative products, resulting in a continued contraction of 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; consequently, bulk transactions are rare, market activity is low, and overall demand remains too weak to absorb the ample supply currently available.
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; inventory levels remain elevated, and the downstream purchasing atmosphere remains sluggish.
SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.
