1、 Price trend
As of September 16th, the average quotation price of domestic high-quality DMF enterprises is 6000 yuan/ton. DMF continues to be strong this week and has entered an accelerated upward phase. Regional spot delivery prices reference: 5850-6000 yuan/ton in Guangdong, South China, 5600-5700 yuan/ton in Shandong and surrounding areas. Mainstream enterprises generally quote above 6000 yuan/ton.
2、 Cause analysis
Cost wise: Methanol port inventory hit a new low of 381800 tons since 2013, a year-on-year decrease of 69.87%; Taicang spot goods are strongly supported at 3765-3790 yuan/ton, but high prices have shown negative feedback. The supply of synthetic ammonia/liquid ammonia in the north is tight beyond expectations, with mainstream prices in Shandong reaching 2690-2930 yuan/ton, setting a new high for the second half of the year. The cost of dimethylamine has risen, directly affecting the methanol end: port inventories have fallen to the lowest level since 2013, and imports continue to contract due to the shutdown of Iranian facilities and the obstruction of passage through the Strait of Hormuz. The short-term supply gap is difficult to fill, but we need to be vigilant about high profits stimulating production resumption – the national operating rate of methanol is 82.89%. In mid to late September, the expectation of multiple sets of facilities restarting has heated up. There have been signs of auction failure and market correction in mainland China this weekend, limiting upward elasticity. Synthetic ammonia end: Coking enterprises have reduced losses and delayed the resumption of Relieve, the quasi price of liquid amino acid has increased to 2950 yuan/ton within the week.
Supply side: The biggest variable this week is the shutdown and maintenance of a coal gasification unit and supporting products starting from September 8th, with a cycle of about 20 days, which is expected to affect revenue of 230 million yuan. The coal gasification unit is the “heart” of downstream product lines such as DMF, and this maintenance further strengthens the supply contraction logic. Starting from mid to late August, the 150000 ton/year plant in Jingzhou will undergo maintenance for about three weeks. As a result, the output of top enterprises is limited, and there is no pressure on factory inventory and a strong willingness to raise prices. The overall production of the industry has declined compared to the previous period.
Demand situation: PU pulp/synthetic leather (consumption ratio of 60%+): The operating rate of ordinary pulp this week was 61%, unchanged from the previous week. The wet process in East China was 8200-8700 yuan/ton, and the dry process was 8500-9000 yuan/ton, with a stable focus. The pulp factory mainly focuses on digesting the increase in DMF and scheduling production according to the plan, with limited new orders and mostly executing pre contracts. The terminal: domestic trade in shoes, clothing, bags and suitcases is weak, and foreign trade is not as good as in previous years. The leather factory only replenishes according to demand without centralized stocking. Autumn and winter orders are “produced according to plan with limited growth”. Electronic grade DMF: independent and strong, but small in size; The demand for acrylic fiber and pharmaceutical solvents is rigid but difficult to change the overall situation. Export: Southeast Asia/South Asia orders remain stable, with only a small amount of domestic surplus diverted.
3、 Future forecast
Analysts believe that the benchmark scenario (with a high probability) is that DMF will remain strongly volatile and the center of gravity will shift slightly upwards in the remaining time of September. The price reference for Jiangsu is in the range of 5600-6300 yuan/ton, supported by: ① Hualu Hengsheng’s maintenance will continue until the end of September, with tight spot prices continuing; ② low methanol inventory and geopolitical premium are difficult to break in the short term; ③ demand during the “Golden September and Silver October” peak season is still slowly released.
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