Insufficient Downstream Demand Leads to Weak DMF Market Prices

May 19th, news:

I. Price Trends

According to the commodity market analysis system, as of May 19, the average price of high-quality DMF from Chinese enterprises was 5,240 CNY per ton. The DMF market prices showed a downward trend, with a quiet trading atmosphere this week. Traders faced significant pressure to sell, and despite continuously lowering their quotes to attract customers, the purchasing willingness of downstream enterprises remained low. Most downstream enterprises adopted a wait-and-see attitude, making only small purchases as needed, resulting in a significant decrease in market transactions compared to last week.

2. Cause Analysis

Market Supply: This week, the operating rates of DMF production enterprises in China remained at a high level. Some facilities that were previously under maintenance have resumed production, further increasing the market supply. The operating rates of large enterprises are generally above 75%, leading to a continuous increase in market supply pressure.

Raw Material Costs: This week, the prices of DMF’s primary raw materials—methanol and liquid ammonia—both experienced fluctuations to varying degrees. Methanol prices, influenced by market supply and demand, initially rose and then fell. Liquid ammonia prices remained relatively stable. Overall, however, the supportive effect of raw material costs on DMF prices has weakened somewhat.

Downstream Demand: Polyurethane Industry: The polyurethane industry continues to experience weak demand for DMF. Insufficient orders from the end-use furniture industry and a sluggish real estate market have led to lackluster growth in furniture consumption, resulting in low operating rates at polyurethane manufacturers and a significant reduction in DMF procurement volumes. Leather Industry: The leather industry is also facing difficulties. The stringent implementation of environmental regulations has restricted production at some leather enterprises, leading to lower operating rates. Meanwhile, intense market competition has driven down leather product prices, squeezing corporate profit margins and further dampening demand for DMF. Electronics Industry: Demand for DMF in the electronics industry remains unimproved. The electronics market is characterized by rapid product upgrades and replacements, and current market demand is growing slowly, making it difficult for DMF demand to provide effective support.

III. Future Market Forecast

DMF analysts believe that, in the short term, DMF prices may continue to decline. The situation of oversupply in the market is unlikely to ease in the near term, and downstream demand is also unlikely to show any significant improvement in the short term. If raw material prices continue to weaken, further reducing DMF costs, the likelihood of price declines will increase even more.