August 17 news
I. Price Trends
According to the commodity market analysis system, as of August 17, the average price of premium DMF in China was 4,480 CNY per ton. This week, the DMF market in China initially remained stable and then saw a slight increase, stabilizing by the weekend. Overall, it has moved away from the annual low (the lowest point of the year was 3,820 CNY per ton) but is still operating in the mid-to-low range.
2. Cause Analysis
Cost Perspective: Methanol: In Taicang, East China, prices rose from 2,580 to 2,707.5 CNY/ton (up 4.94% week-on-week); on the 17th, prices in East China reached 2,850 CNY/ton. Most coal-to-methanol plants either produce their own coal or rely on long-term coal supply agreements, with total costs ranging from 2,200 to 2,300 CNY/ton. Integrated facilities continue to enjoy a solid cost advantage, and their profit margins remain robust. According to Mysteel’s weekly sample data, average ex-factory prices stood at 4,450 CNY/ton this week (up 3.49% week-on-week), while average costs were 3,898 CNY/ton (up 1.12% week-on-week). The sample’s gross profit margin was approximately 552 CNY/ton (up 24% week-on-week). Plants sourcing raw materials externally still operate just slightly below break-even, whereas integrated facilities have seen improved profitability.
Supply side: Production is ongoing, with the industry's capacity utilization rate at approximately 53.2%, a sequential increase of 2.7%. There are no large-scale maintenance or restarts in the main production areas of Shandong, Anhui, and Jiangsu, and weekly output remains stable. Inventory is primarily focused on fulfilling long-term contracts, with limited spot market supply. Social inventory is turning over normally, with no pressure for inventory accumulation.
Demand situation: PU slurry/synthetic leather (accounting for over 60% of consumption), wet process in East China 7,600–8,100, dry process 8,000–8,500 CNY/ton, slurry plants are holding prices to absorb the DMF price increase, with an operating rate of about 55%. Domestic demand for autumn and winter shoes, clothing, and luggage is weak, and foreign trade is lower than in previous years. Leather factories are only purchasing as needed, without any concentrated stockpiling. Other sectors, such as acrylic fibers and pharmaceutical solvents, have stable but small volume demands. Electronic-grade DMF is relatively strong, while industrial-grade DMF sees more inquiries but fewer orders. Exports: orders from Southeast Asia and South Asia are stable, but they only divert a small portion of China's surplus, which does not significantly change the domestic demand situation.
3. Future Market Forecast
DMF analysts believe: the market will experience narrow-range fluctuations, with stability being more likely than a decline, while waiting for a turning point in demand. The key range to watch is 4,400–4,600 CNY/ton in East China. Support comes from the short-term strength of methanol, the desire of factories to recover from losses, and the lack of inventory pressure, which reduces the willingness of manufacturers to lower prices. Resistance is at 4,600 CNY/ton, as the off-season for slurry has not ended, recycled DMF is being used as a substitute, and the losses of external procurement facilities limit the transmission of price increases.
