DMF Supply Tightens in Early April, Prices Remain Strong

April 15th, news:

I. Price Trends

According to the commodity market analysis system: As of April 15, the average quoted price for top-grade DMF from Chinese enterprises is 5840 CNY/ton. The recent DMF market prices have shown a slight increase, and currently, the DMF market is operating with a slightly strong trend.

II. Analysis of Causes

Market Supply: The supply in China's DMF market shows a relatively complex situation. Some major production enterprises are operating relatively stably, maintaining a certain level of production capacity. However, some companies have experienced varying degrees of production cuts or shutdowns due to equipment maintenance, environmental policies, and other factors, leading to fluctuations in the overall market supply. In some regions, there is even a tight supply situation. From a regional perspective, the East China region, as the main production and consumption area for DMF, has a significant impact on the market. The production status of some large enterprises in this area directly affects the supply and prices in the surrounding markets. In the North China region, some companies have seen a decline in facility utilization rates due to increased environmental inspection efforts, further impacting the overall supply landscape of the market.

Inventory situation: In April, the inventory level of DMF in China is generally at a moderately low level. Due to some companies reducing or halting production, the new supply in the market has decreased, leading to a relatively faster inventory digestion rate. At the same time, the stable release of downstream demand has also contributed to the reduction of inventory. However, there are differences in inventory levels across different regions. In areas with convenient transportation and concentrated consumption, the inventory is relatively lower, while in some remote areas, the inventory is relatively higher.

Raw Material Costs: The primary raw materials for DMF are methanol and liquid ammonia. Their price fluctuations significantly impact DMF costs. In April, the market price of methanol initially rose and then fell. Earlier in the month, rising international crude oil prices and maintenance activities at some methanol plants led to an increase in methanol prices, directly boosting DMF production costs. Later in the month, however, as new methanol units began operations and import volumes increased, market supply gradually eased, causing methanol prices to decline. This, to some extent, alleviated the cost pressure on DMF. Meanwhile, liquid ammonia prices remained relatively stable in April, though localized areas experienced slight fluctuations. In certain regions, liquid ammonia prices rose slightly due to the onset of the peak agricultural demand season, which also had a certain impact on DMF costs.

Downstream Demand: The downstream industries of DMF primarily include polyurethane, pharmaceuticals, agrochemicals, and leather goods. In April, these industries showed varying trends in their demand for DMF. In the polyurethane sector, as the real estate market gradually recovers and the automotive industry continues to develop steadily, demand for polyurethane products has increased, thereby boosting the demand for DMF. In the pharmaceutical and agrochemical sectors, demand for DMF has remained relatively stable, with less impact from seasonal factors. Meanwhile, in the leather industry, due to increasingly stringent environmental regulations, some companies have reduced their use of DMF; however, overall demand has still stayed at a certain level.

III. Future Market Forecast

DMF analysts believe that, taking into account fundamentals, cost factors, and demand trends, DMF prices are expected to show a volatile and adjusting pattern in the latter part of April. If market supply continues to remain tight while demand maintains steady growth, DMF prices could see some degree of increase. However, if raw material prices fall sharply or downstream demand falls short of expectations, DMF prices might also experience a pullback.

Spot Market Trend Forecast: According to the Spot Market curve, the 10-day moving average has crossed above the 20-day moving average, and the price continues to operate at a high level. It is expected that the price of DMF will likely increase in the short term in China.