Analysis of DMC Market in Q3, 2017

Introduction: The chemicals market in Q3, 2017 turned to be active. Influenced by various policies, the limited supply and high production cost supported the DMC market to move up continuously in Q3, 2017.

From the chart above, the dimethyl carbonate (DMC) market jumped first and then slid and rebounded high finally in Q3, 2017. The fluctuation range was between RMB 5,000/mt and RMB 8,000/mt. DMC prices were much higher than ethyl acetate market prices. The DMC price even exceeded the price of butyl acetate. Moreover, the correlation between DMC market and PO market declined. In Q3, 2017, the profits of DMC and propylene glycol units increased greatly.  

DMC prices had exceeded the prices of its substitutes, which meant that the demand for DMC declined. However, the increased prices showed the importance of the tight supply.

Many factors caused the tight supply of DMC. First, the maintenance was intensive. The unit at Shandong Shida Shenghua Chemical underwent maintenance in July and restarted in July. In July, units at Taizhou Linggu Fine Chemical, Zhetie Daphoon, Yunhua Green Energy and Shandong Depu Chemical also took overhaul. Second, influenced by other factors, the overall operating rate declined. Finally, the policy influenced the distribution of goods. Dangerous goods are forbidden to be transported via Qingdao port from mid-August. In H1 August, most producers mainly produce exported orders. Hence, the supply was limited in the domestic market.  

As for the demand, the demand for DMC declined as the prices were higher. Some downstream users adjusted their formulas. As the DMC market needs to import a large mount of goods and the profits are satisfactory, the newly-added DMC units are developing fast. Moreover, the electrolyte and polycarbonate industries supported the DMC market.

Supported by the tight supply, the DMC market saw more profits in Q3, 2017. Moreover, the correlation between DMC and its raw materials shrink. The purchasing of DMC’s raw materials will be the focus in the coming market.