SunSirs: DMF Prices Bottomed Out in 2025, and Here's the Market Outlook for 2026

Price trend:

In 2025, the Chinese DMF market was characterized by oversupply, low prices, and continued industry losses. The overall price of DMF trended downwards throughout 2025, with a 10% decrease. The highest price in February was at 4,200 RMB/ton, while the lowest price was at the end of the year at 3,800 RMB/ton. The price range for the entire year was between 3,900 and 4,100 RMB/ton, fluctuating within this low range throughout the year.

DMF Market Review for 2025

In 2025, the DMF market was characterized by an oversupply, with production capacity continuing to increase. However, demand from downstream industries such as pulp and paper and pharmaceuticals remained weak, leading to widespread losses in the industry. From January to July, cumulative exports reached 84,000 tons, a year-on-year increase of 26.10%, with South Korea, Japan, and India being the main export destinations. In 2025, DMF market supply capacity increased significantly, and the industry was in a state of "overcapacity" throughout the year. Even if companies voluntarily reduced production to maintain prices, it was difficult to reverse the downward trend. Weak domestic demand suppressed prices; downstream industries such as polyurethane pulp, electronics, and pharmaceuticals were experiencing sluggish demand growth. Downstream factories generally adopted a "replenish as needed, use as purchased" strategy, failing to provide strong support for the market. Strong exports alleviated pressure; driven by lower domestic prices and increased overseas demand, DMF exports had been rising year after year, consuming domestic capacity and alleviating inventory pressure.

Industry chain structure

Upstream: Basic raw materials: Methanol and synthetic ammonia are the direct raw materials for the production of dimethylamine (DMA). Price fluctuations have a decisive impact on the cost of DMF. Companies with integrated methanol and synthetic ammonia production capacity have a significant advantage in cost control. Midstream: DMF production and supply: The production process is mature, with the core being the carbonyl synthesis of dimethylamine and carbon monoxide. The industry is highly concentrated, with production capacity mainly distributed in Shandong, Zhejiang, and Jiangsu. As of the end of 2025, it facesd serious overcapacity and homogeneous competition, resulting in meager profits. Downstream: Diversified application fields: Polyurethane synthetic leather/PU slurry: This is the largest consumption area, accounting for more than 50%. Acrylic fiber spinning: As a solvent for wet spinning, demand is relatively stable. Pharmaceuticals and pesticides: As an important organic synthesis reaction solvent, demand is relatively inelastic. Emerging fields: Electronic chemicals: Used as a diluent for PCB photoresists, requiring electronic-grade ultra-high purity. This is the direction with the highest added value and greatest growth potential. Lithium-ion batteries: As a potential option for electrolyte solvents, it is in the research and development and application exploration stage, and may bring increased demand in the future.

DMF Market Development Trends in 2026

Overall market landscape: As of the end of 2025, the domestic DMF market was facing severe overcapacity, and industry profit margins were under continuous pressure. The market is entering a period of deep consolidation.

Price trend: Prices are expected to continue fluctuating in a low range near the cost line throughout the year. Significant price increases are unlikely due to weak downstream demand and a lack of strong upward momentum.

Supply-side trends: In recent years, DMF production capacity has continued to expand. However, low demand has led to the gradual elimination and consolidation of smaller domestic production facilities. Sustained losses may force some high-cost, outdated facilities to permanently exit the market, slowing down the pace of capacity expansion. Given the low profitability of new capacity, decisions regarding new projects will be more cautious, and the rate of expansion is expected to slow down.

Demand-side trends: The market economy is recovering slowly, with traditional downstream sectors (such as pulp and paper, and leather) primarily engaging in essential purchases. Demand in emerging sectors (such as electronics, lithium batteries, and pharmaceuticals) is growing slowly.  Export dependence is increasing, and given stable demand in major export markets such as South Korea and India, exports will continue to be an important channel for consuming production capacity. The volume of exports will directly impact the domestic supply-demand balance.

Competitive landscape

Domestic DMF production capacity is relatively concentrated, mainly in East China (Jiangshan Chemical, etc.) and North China (Hualu Hengsheng, Luxi Chemical), supplemented by Central/Northwest China (Henan Junhua, Shaanxi Yan'an), matching the downstream polyurethane and electronic chemical clusters. Leading companies include Hualu Hengsheng (200,000-ton high-end line in Jingzhou scheduled for production in 2026, with electronic-grade purity of 99.99%), and Jiangshan Chemical (Ningbo plant upgraded to 250,000 tons, focusing on pharmaceutical grade).  Thanks to integrated production and advanced processes, their costs are 15-20% lower than the industry average, and they hold over 80% of the high-end market share. Other companies such as Luxi Chemical (200,000 tons, with self-sufficient raw materials), Henan Junhua, and Shaanxi Yan'an have capacities of 100,000-200,000 tons, focusing on regional and industrial-grade markets, with moderate cost competitiveness.

Regarding DMF production capacity:

The overall trend for DMF production capacity in 2026 will shift from "quantity growth" to "structural optimization."  The overall capacity growth rate will slow down significantly, or even experience negative growth, as the market enters a phase of inventory adjustment.  Sustained losses will force some older, high-cost, technologically backward, and small-scale facilities to permanently shut down.  New capacity additions in 2026 will be relatively small, and the willingness to put planned new projects into operation will be low, with a high probability of delays or cancellations.  Whether leading companies (such as Hualu Hengsheng and Luxi Chemical) maintain or reduce capacity will have a significant impact on overall market supply and market expectations. In short, the core theme for DMF capacity in 2026 is "consolidation" rather than "expansion."

Regarding exports

It is expected that DMF exports will continue to be an important support for the domestic market in 2026, but their growth rate and stability face challenges. Price competitiveness remains a key factor, with domestically produced low-priced goods still attractive. Supply chain stability is also crucial, as China's mature chemical supply chain can provide a stable supply. Traditional demand from manufacturing industries in major destinations such as South Korea, India, and Japan will also play a role.

Regarding imports:

Sources of industrial-grade DMF imports into China: By 2025, China had achieved complete self-sufficiency in industrial-grade DMF production, with virtually no need for large-scale imports. As of December 25, China's DMF imports mainly consist of high-end electronic-grade DMF, primarily from BASF (Germany), OCI (South Korea), and Mitsubishi Chemical (Japan). Globally, the sources of industrial-grade DMF imports are highly concentrated in China, Vietnam, and the United States. The projected DMF import volume for 2026 is 28,000-32,000 tons, representing a year-on-year decrease of approximately 25%.

In terms of consumption

In 2026, the overall consumption growth of DMF is expected to face pressure. Domestic traditional demand is weak, and consumption is highly dependent on exports and emerging sectors. In terms of consumption structure, traditional sectors (PU resins, acrylic fibers, pharmaceuticals, etc.) are expected to maintain stable consumption or experience a slight decline, making it difficult to provide incremental growth. Emerging sectors (electronic chemicals, lithium battery solvents, etc.) and exports have become crucial components of the consumption structure, and their share may further increase.

Technical aspects

Leading companies will leverage their capital and R&D advantages to invest heavily in catalyst innovation, intelligent manufacturing, and the development of electronic-grade products, thereby building technological barriers. Specialized companies may develop expertise in purification technologies for specific high-end products or in customized services, enabling them to survive through differentiation. Industry impact: Any major breakthrough in key cost-reduction technologies (such as new catalysts) could reshape the industry's cost curve and accelerate the elimination of outdated production capacity.

Market Outlook

In recent years, due to the oversupply of DMF in the domestic market, companies have been turning their attention to the international market, actively developing export trade. DMF exports have been significant, and some foreign DMF manufacturers are considering closing their existing production facilities due to environmental regulations and production costs. This presents an opportunity for Chinese DMF manufacturers to expand their export business. It is expected that China will continue to have a large volume of DMF exports annually until 2026. With the continuous development of downstream DMF products and the increasing demand gap in foreign markets, China's DMF industry still has great development prospects. Overall, the DMF market is expected to show steady growth in 2026.

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