Current Location： Home > News > Industry Focus > DMF market supply and demand imbalance, when will prices stop falling?

[Industry Focus]：DMF market supply and demand imbalance, when will prices stop falling?

Read： 186 Time：3months ago Source：Jin Lianchuang, Yi Tianxia

Rapid Expansion of 1. Capacity and Oversupply in the Market

since 2021, the total domestic DMF (dimethylformamide) production capacity has entered a phase of rapid expansion. According to statistics, the total production capacity of DMF enterprises increased rapidly from 910000 tons/year to 1.77 million tons/year this year, a cumulative increase of 860000 tons/year, an increase of 94.5. This rapid increase in production capacity has led to a substantial increase in market supply, while the follow-up of demand is limited, thus exacerbating the contradiction of oversupply in the market. This supply-demand imbalance has kept prices in the DMF market down and to their lowest level since 2017.

Data source: General Administration of Customs

low operating rates in the 2. industry and weak factory prices

despite the oversupply in the market, the operating rate of DMF plants is not high, only maintained at about 40%. This is mainly due to the low market prices, factory profits have been severely compressed, resulting in many factories choose to stop maintenance to reduce losses. However, even in the case of low operating rates, the market supply is still sufficient, and many attempts by the factory to raise prices have failed. This further proves the severity of the current market supply and demand relationship.

3. corporate profits fall sharply

the profit situation of DMF companies has continued to deteriorate in recent years. This year, the company has been in a state of loss for a long time, with only a small profit in February and March. Up to now, the average rough profit of domestic enterprises is -263 yuan/ton, down 587 yuan/ton from last year's average annual profit of 324 yuan/ton, a range of 181 percent. The highest point of this year's rough profit appeared in mid-March, about 230 yuan/ton, but it is still far below last year's highest profit of 1722 yuan/ton. The lowest profit appeared in mid-May, which was about -685 yuan/ton, which was also lower than the lowest profit of -497 yuan/ton last year. Overall, the volatility of corporate profits has narrowed significantly, indicating the severity of the market environment.

Data source: General Administration of Customs

4. Market Price Fluctuation and the Impact of Raw Material Cost

in January-April, the domestic DMF market price basically fluctuated slightly above and below the cost line. During this period, corporate rough profits mainly fluctuated around a narrow range of $0/tonne. Due to the large number of factory installations in the first quarter, the low operating rate of the industry, and the favorable support on the supply side, prices did not fall sharply. At the same time, the prices of raw materials methanol and synthetic ammonia also fluctuate within a certain range, which has a certain impact on the price of DMF. However, since May, the DMF market has continued to decline, the downstream industry has entered the off-season, and the ex-factory price has fallen below the 4000 yuan/ton mark, a record low price.

5. market rebound and fall back again

at the end of September, the DMF market began to rise due to the parking maintenance of Jiangxi heart-to-heart device and more macro-good news on the periphery. After the National Day, the market rose to 500 yuan/ton, DMF prices rose to near the cost line, some factories turned a profit. However, this upward trend did not continue. After mid-October, with the restart of a number of DMF plant installations, the market supply increased significantly, coupled with downstream high price resistance and insufficient demand follow-up, DMF Market Price fall back again. Throughout November, DMF prices continued to decline, returning to their previous lows in October.

6. Future Market Outlook

at present, Guizhou Tianfu Chemical's 120000-ton/year plant is being restarted and is expected to produce products early next week. This will further increase market supply. In the short term, the DMF market lacks effective positive support and the market remains at downside risk. It is difficult for the factory to turn a profit, but considering the pressure on the cost side of the factory, it is expected that the profit margin will continue to be limited.

Source: Jinlianchuang, Huayi World

* Disclaimer: the content contained in the Internet, WeChat public number and other public channels, we maintain a neutral attitude to the views in the article. This article is for reference only, exchange. The copyright of the reprinted manuscript belongs to the original author and organization. If there is infringement, please contact the customer service of Huayi World to delete it.

Previous： 71.1 billion Refining "Super Project" Officially Launched in Gulei! Contains phenol ketone, bisphenol A, etc

Next： Analysis of MMA domestic market development in 2024 and outlook for the future.

News Categories