Since mid-August, DMF market prices have risen continuously; by the end of the month, the increase exceeded 1,200 RMB/tonne, with mainstream prices peaking near 6,000 RMB /tonne—levels approaching those seen during the major US-Iran conflict in March. Early-month factors—including WuXi STA’s monthly tender, major producers consolidating export shipments, and the onset of downstream demand for slurry materials—led to rapid inventory depletion and a strong order book. Consequently, producers became more determined to hold prices firm, continuously raising their offers. Downstream buyers kept pace with procurement while spot supplies remained tight; this situation was exacerbated by mid-to-late month maintenance shutdowns at Guizhou Tianfu and Hualu Jingzhou, fueling a relentless upward trend in producer quotes.
As prices climbed, downstream resistance to high costs grew, cooling market trading activity and prompting industry players to adopt a cautious wait-and-see approach regarding the future outlook. In mid-to-late August, Hualu Dezhou brought a new 100,000-tonne/year unit online, and Guizhou Tianfu Chemical restarted operations on August 24. Coupled with the gradual fulfillment of existing orders and insufficient follow-through on new orders, some producers began to see inventory accumulation, and spot supply gradually returned to normal levels. Some producers lowered their quotes, and actual transaction prices softened slightly; the DMF market began to weaken at the end of August, ending a rally that had lasted approximately 20 days.
On August 30, the US military struck a rocket launcher that Iran was preparing to use to deploy mines in the Strait of Hormuz—the first US military action against Iran in over a month. In response, the Islamic Revolutionary Guard Corps (IRGC) announced on social media in the early hours of August 31 that Iran had launched missiles at US military bases. Tensions between the US and Iran escalated once more, causing international crude oil prices to surge and driving up the broader energy and chemical markets. The market for methanol—a key DMF feedstock—saw a sharp spike, with methanol futures hitting the daily limit-up, while synthetic ammonia prices also continued to rise. Favorable cost-side factors have somewhat bolstered market sentiment among DMF players; combined with currently low factory inventory levels, producers are increasingly inclined to maintain stable prices. While some plants in Shandong have raised their offers slightly, the broader market has shown little momentum to follow suit. Trading activity remains sluggish, and a "wait-and-see" attitude prevails.
Supported by rising raw material costs and a lack of inventory pressure, the DMF market is expected to remain stable in the short term, though a slight decline cannot be ruled out. Producers currently show little willingness to offer price concessions; however, if demand remains weak, inventories are likely to rise as manufacturers face pressure to move stock. Furthermore, given that profit margins are already high, the boost from cost-side factors is expected to be limited, especially since the rise in raw material prices is largely driven by geopolitical conflicts—a factor fraught with uncertainty regarding its sustainability. Consequently, the DMF market appears to lack the momentum for further gains and faces a significant risk of weakening in the near future. (Source: JLC)
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