Price trends

According to the commodity market analysis system of SunSirs, as of July 26, the average quoted price for premium-grade DMF among domestic producers stood at 4,420 RMB/ton. The overall DMF market remained stagnant at low levels, characterized by narrow-range consolidation; mainstream delivered prices were 4,500-4,600 RMB/ton in East China, 4,370-4,470 RMB/ton in Shandong and North China, and 4,600-4,700 RMB/ton in South China, with some plants quoting around 4,300-4,420 RMB/ton. While the previous downward trend has slowed, the market lacks the momentum for a rebound.

Market Analysis

Market Overview: A tug-of-war is playing out amidst weak supply and demand. On the supply side, spot availability is ample; while some production units are alternating between maintenance and restarts, major manufacturers are inclined to support prices. On the demand side, the market is in the traditional off-season due to high temperatures. Orders for PU resin (accounting for approximately 60% of consumption) from the footwear, apparel, and luggage sectors are insufficient. Downstream buyers are purchasing strictly on an as-needed basis, with actual transactions dominated by small orders for essential needs; meanwhile, traders are actively offloading stock to reduce inventory, and a strong wait-and-see sentiment prevails.

Raw Materials: Methanol prices are fluctuating with a downward bias due to expectations of inventory accumulation at ports, while liquid ammonia/synthetic ammonia prices remain generally stable; consequently, cost support for the product price is limited. As raw material costs have declined in tandem, theoretical factory profits remain around 300 RMB/ton. Leading enterprises remain profitable and show little willingness to voluntarily cut production to prop up prices, meaning cost factors are unlikely to drive prices upward.

Operating Rates: Industry capacity utilization remains low at 40%-45% (recently recorded at approximately 44.6%). Some units in Henan, Guizhou, and Shandong have reduced operating loads or undergone short-term or long-term shutdowns due to profit margins or inventory pressure. While the growth in supply has moderated, the oversupply pattern remains unchanged, and overall supply conditions stay relatively loose.

Market Outlook

Analysts at SunSirs anticipate that the DMF market will experience narrow fluctuations at low levels in the short term, with insufficient upward momentum. Should the price of the feedstock methanol continue to weaken and units currently under maintenance restart, supply pressure is likely to re-emerge; attention should be paid to the implementation of maintenance schedules at major plants and adjustments to official list prices at the end of July. A genuine market rebound may occur later in August or September if autumn/winter orders materialize and demand recovers; for now, market activity remains focused on inventory depletion and meeting essential demand.

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