Price trend
According to data from the SunSirs Commodity Market Analysis System, as of May 29, the average quoted price for premium-grade DMF among domestic manufacturers stood at 4,760 RMB/ton. The market as a whole is characterized by loose supply, sluggish demand, continuously weakening prices, and downward pressure on transaction volumes. This month, there has been a concentrated resumption of production across the industry, with operating rates remaining at high levels, resulting in an ample supply of market inventory. Meanwhile, downstream end-users have shown weak follow-through on essential demand and no concentrated need for inventory replenishment; consequently, the supply-demand imbalance continues to intensify. Furthermore, weak support from upstream raw materials, coupled with frequent instances of low-price competition within the market, has caused the price center of gravity to shift steadily downward, leaving the overall market under sustained pressure.
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.
Plant Operations: Regarding plant operations, several key production units—which had undergone maintenance during April—resumed production en masse in May. Facilities in core production hubs, such as Guizhou and Anyang, continued to operate normally at full capacity. Consequently, the industry-wide operating rate remained consistently stable at a high level of over 75%, marking a significant increase compared to the previous month. Domestic mainstream manufacturers have fully utilized their production capacities, leading to a continuous increase in spot market supplies; overall market supply is currently highly abundant, with no supportive factors—such as supply shortages or unexpected plant shutdowns—present to bolster the market.
Regarding Inventory: In terms of both inventory levels and shipments, the sector is facing a dual challenge: high operating rates coinciding with sluggish demand. Consequently, both social inventory and factory stockpiles continue to accumulate, placing significant inventory pressure on the majority of enterprises. To accelerate inventory destocking and recoup capital, various manufacturers and traders have initiated regional price wars; the frequent emergence of low-priced goods in the market has further exacerbated the supply-side surplus, causing shipment pressure within the industry to continue its upward trend.
Market Outlook:
According to analysts at SunSirs, the domestic DMF market is expected to maintain a pattern of weak, volatile decline during early June; while it may gradually stabilize in the middle to latter half of the month, the probability of a significant rebound remains extremely low.
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