According to SunSirs, the domestic dimethyl carbonate (DMC) market continued its strong upward trend in early September, with prices rising rapidly. The market was characterized by tight supply, firm pricing by manufacturers, and pre-holiday stockpiling by downstream buyers. As of September 11, the average domestic price for industrial-grade DMC stood at 6,500 RMB/ton—a 30.43% increase since the beginning of the month and a cumulative rise of over 70% over the past two months.
Analysis of Market Drivers
Supply side: Plant maintenance and the exit of inefficient capacity limit the increase in spot supply.
1. Multiple DMC units across the industry have entered scheduled maintenance shutdowns or are operating at reduced loads, leading to a contraction in effective supply. The pace of new capacity additions has slowed, and inefficient units that previously suffered prolonged losses remain idle, making it difficult for the industry's operating rate to rise rapidly.
2. Export orders continue to surge, with a portion of output shipped directly overseas; this further reduces the volume of spot goods available for domestic circulation, exacerbating the tight domestic supply situation.
3. Rising raw material prices have driven up DMC production costs, strengthening manufacturers' resolve to maintain price levels; with the pressure of financial losses easing, there is little willingness to sell at low prices.
Demand side: Driven by the dual pillars of lithium-ion battery electrolytes and PC, compounded by pre-stocking ahead of the National Day holiday.
1. Battery Electrolyte (Primary Growth Driver): Production schedules for power and energy storage batteries are recovering, leading to increased operating rates among electrolyte manufacturers and sustained, robust demand for battery-grade DMC. Battery-grade DMC faces certification barriers and offers less production flexibility than industrial-grade variants, resulting in a widening price premium.
2. Polycarbonate (PC): PC production facilities are operating steadily and maintaining consistent DMC consumption, serving as a stable source of bulk demand.
3. Pre-holiday Stocking Window: Downstream enterprises began stocking up ahead of the National Day holiday in early September; concentrated purchasing has amplified short-term demand, further driving up prices. Meanwhile, demand from traditional fine chemical sectors—such as pharmaceuticals and coatings—remains stable, contributing little to market volatility.
Cost side: Raw material prices are rising, strengthening cost support.
In early September, the prices of two key raw materials rose simultaneously by over 14%, directly driving up DMC production costs. This substantial rise in costs has provided a solid floor for DMC prices. The magnitude of the DMC price increase far exceeded that of the two key raw materials—propylene oxide and methanol. This cost-driven rally was fundamentally fueled by supply constraints resulting from plant maintenance and export diversion, compounded by downstream stockpiling ahead of the holidays.
Market Outlook: Predominantly strong fluctuation at high levels; facing selling pressure after a brief upward push.
The current pattern of tight spot supply persists, driven by low factory inventories and the continued diversion of spot goods to export orders, alongside price premiums supported by certification barriers for battery-grade DMC; consequently, there remains scope for a slight upward test of prices in the short term. However, as prices are already situated in the fifth tier of their historical high range, the upside is limited; furthermore, buying momentum is expected to weaken significantly as pre-National Day stocking winds down and the surge in bulk purchasing subsides.
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