DMF Market Prices Remain Stable with Balanced Supply and Demand in China

April 27 news

I. Price Trends

According to the commodity market analysis system, as of April 27, the average price of top-grade DMF offered by Chinese companies was 5,810 CNY per ton. This week, DMF prices showed a clear downward trend. At the beginning of the week, the average market price was still within a relatively stable range, but as time went on, prices continued to decline. By the end of the week, the DMF price in the main markets had fallen by about 300-400 CNY per ton compared to the beginning of the week. The price differences among different regions were also quite noticeable, with the price drop in the East China region being relatively larger, while the South China region's prices remained relatively firm, although they also declined to some extent.

II. Cause Analysis

Market Supply: This week, the operating rates of DMF producers in China remained at a high level overall. Some units that were previously under maintenance have resumed production, further increasing the market supply. The operating rates of some large enterprises have been maintained above 80%, leading to a continuous increase in supply pressure.

Raw Material Costs: The price trends of raw materials—methanol and liquid ammonia—will directly affect the production costs and market prices of DMF. If raw material prices continue to decline, DMF prices will have greater room to fall. Conversely, if raw material prices stabilize or rise, the extent to which DMF prices can fall may be somewhat limited.

Downstream Demand: Polyurethane Industry: As the primary downstream sector for DMF, the polyurethane industry continued to experience weak demand this week. The end-market showed sluggish growth in demand for polyurethane products, resulting in low operating rates at polyurethane manufacturers. To control costs, these companies have reduced their DMF procurement volumes, putting significant downward pressure on market prices. Leather Industry: The leather industry is also facing difficulties. The stringent enforcement of environmental regulations has restricted production at some leather enterprises, while intense market competition and sluggish product sales have led to a substantial decline in leather companies’ demand for DMF, further suppressing overall market demand for DMF. Pharmaceutical and Agrochemical Industries: While demand for DMF from the pharmaceutical and agrochemical industries remains relatively stable, its share is comparatively small. This week, production in both sectors was largely normal, with no significant fluctuations in DMF demand. However, these industries are unable to provide meaningful support to overall market demand.

III. Future Market Forecast

DMF analysts believe that in the short term, DMF prices may continue to fall. The situation of oversupply in the market is unlikely to change in the short term, and downstream demand is also unlikely to see significant improvement in the short term. If raw material prices continue to fall, leading to a further reduction in DMF costs, prices may continue to decline.