In mid September, the domestic dimethyl carbonate (DMC) market rose to a new high in nearly four years, with a peak increase of 52.03% compared to the beginning of the year. Subsequently, there was a high-level consolidation, and the market quickly weakened at the end of the month. The pessimistic sentiment in the market spread, and the price center shifted significantly downwards. As of September 28th, the average price of industrial grade dimethyl carbonate in China was 6233 yuan/ton, a decrease of 7.43% from mid month and an increase of 25.08% from the beginning of the month.
Driving factors for decline:
On the supply side, the industry’s production has increased by 1.94 percentage points compared to the first ten days, and the spot market has shifted from tight to loose.
On the demand side, as export orders enter the final stage of delivery, the diversion effect on domestic spot goods weakens; Downstream domestic trade is strongly resistant to the high prices that quickly rose in the early stage. The PC and ethyl ester industries have experienced varying degrees of decline due to high costs, and there is a lack of willingness to stock up before the holiday. Therefore, many parties are holding small orders for essential purchases.
Cost side: Due to the decrease in international crude oil and propylene prices, as well as the resumption of operation of some facilities, the supply of raw material propylene oxide has become loose, resulting in continued weak prices and insufficient support for DMC costs.
Market forecast: October may continue the weak bottoming out pattern
Taking into account current factors, the pressure on the supply side continues, cost support is weak, improvement on the demand side is limited, and the technical aspect is bearish. It is expected that the overall pressure on the dimethyl carbonate market will continue to decline in October, but the space for deep decline may be limited.
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