Market Overview: Prices continue to decline (12.10-12.24)
According to the monitoring of the commodity market analysis system of Shengyi Society, as of December 24th, the average price of industrial grade dimethyl carbonate in China was 4166 yuan/ton, a decrease of 5.3% in mid December. Under the combined effects of increasing supply pressure, weakened cost support, and flat demand, the market has continued its downward trend since December.
Supply side: Device restart, supply pressure becomes core negative
The significant increase in supply is the fundamental reason for the current market turn. Since December, devices that were previously shut down or undergoing maintenance have been restarted and produced at full capacity. Faced with an increase in supply, some production enterprises have accumulated inventory. In order to promote sales and reduce inventory pressure, they have adopted price reduction strategies, further exacerbating the bearish sentiment in the market and the downward inertia of prices.
Demand side: Strong demand is dominant, with low willingness to buy
Downstream demand has failed to provide effective support to the market. The main downstream industries such as polycarbonate and pharmaceutical solid light mostly maintain production through essential procurement, and generally adopt a wait-and-see attitude towards the future market, cautious in entering the market for procurement. When the price is in a downward channel, the downstream mentality of “buying up and not buying down” is obvious, only maintaining small orders and replenishing on demand, unable to digest the rapidly increasing supply, resulting in difficulty in increasing market transactions.
Cost side: Raw material prices decline, support level shifts downwards
As of December 24th, the benchmark price of epoxy propane, the main raw material, was 7850 yuan/ton, a decrease of 3.88% within this ten day period. The synchronous decline in raw material costs has significantly weakened the cost support for dimethyl carbonate. In the context of the already prominent supply-demand contradiction, the downward shift of the cost center has opened up greater downward space for product prices, weakening the ability of production enterprises to raise prices.
Outlook for the future: The supply-demand game continues, and the market may continue to experience weak fluctuations
In mid December, the dimethyl carbonate market continued its clear downward trend under the triple pressure of supply recovery, flat demand, and cost collapse. Among them, the rapid recovery of the supply side is the most core contradiction that has led to the current market turn and sustained downturn. Looking ahead to the future, whether the market can stop falling and stabilize depends on whether the situation of oversupply can be alleviated through proactive production cuts by enterprises. Until clear signals of supply contraction appear, it is expected that the market will maintain a weak and volatile pattern.
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