Introduction: The domestic dimethyl carbonate (DMC) market has recently accelerated into a downward trend. As of September 23, quoted prices in the Shandong market had fallen to 5,300 yuan/ton, while the East China market similarly dropped to 5,250 yuan/ton, representing a decline of over 18.9% from the highs recorded on September 17. Pessimism spread rapidly across the market. This downturn was not driven by a single factor but rather by the convergence of three key pressures: inventory accumulation on the supply side, the collapse of cost support, and persistent weakness in demand.
The supply side served as the direct catalyst for this decline. Previously idle units undergoing maintenance gradually resumed operations; notably, Shandong Depu’s new unit reached full capacity, and Lihuayi returned to normal production, significantly increasing the volume of spot goods available in the market. However, downstream procurement did not keep pace with this increased supply, leading to a gradual buildup of factory inventories from previously low levels. For some producers, inventory clearance pressure shifted from "manageable" to "urgent." More critically, with the upcoming holiday period approaching, producers’ willingness to sell increased markedly. Negotiations for actual transactions moved from "hidden price cuts" to "explicit concessions," with more instances of discounted sales. This further accelerated the downward shift in price centers.
Loosening costs opened the door for price declines. Propylene oxide (PO), the core raw material for DMC produced via the PO transesterification process, surged strongly in early September due to reduced operating rates at certain plants and tight supply. Prices jumped from around 9,600 yuan/ton to 12,000 yuan/ton—a 25% increase in half a month—providing strong cost-based support for DMC. However, after mid-September, PO prices plummeted. On September 23, daily prices in Shandong dropped sharply by 400–600 yuan/ton, settling in the range of 11,070–11,100 yuan/ton. The rapid retreat in raw material prices quickly dismantled the cost-support logic for DMC. With factories losing their cost "anchor," room for price concessions expanded further.
Persistent weakness in demand remained the fundamental constraint throughout this downturn. In the primary downstream sector of electrolyte solvents, end-user orders in the new energy market were lackluster. Electrolyte manufacturers focused primarily on consuming existing inventory and fulfilling long-term contract orders, showing little enthusiasm for inquiries regarding new contracts. Price suppression was widespread. Traditional downstream sectors such as polycarbonate also lacked positive drivers, with insufficient willingness for bulk replenishment. Downstream end-users largely maintained purchasing based on rigid demand needs, resulting in heavy wait-and-see sentiment and limited transaction follow-through overall. Even though prices had fallen to staged lows, there was no significant bottom-fishing or concentrated stockpiling behavior from downstream players, indicating that weak demand stemmed not just from price levels, but from a dual deficit in orders and confidence.
In the short term, the market is likely to continue its weak trajectory before and after the holiday period. Inventory clearance pressure at factories has not yet been effectively alleviated, and during the remaining trading days before the holidays, selling at discounted prices will remain the mainstream strategy. In the medium term, the market may undergo a process of "bottoming out followed by tentative stabilization" after the holidays. Current prices are approaching the cash cost line for some PO-transesterification producers. Further deep declines would trigger additional reductions in operating rates or shutdowns among these units. This spontaneous contraction on the supply side could provide foundational support for prices. Meanwhile, there is an objective need for downstream buyers to replenish stocks based on rigid demand after the holidays. If factory inventories are partially cleared by then, market sentiment may gradually shift from "offering discounts" to "tentative price holding." Until there is substantive improvement in end-user demand for electrolytes and polycarbonates, any rebound will be strictly capped by the ample supply landscape.
The sharp decline in domestic DMC prices represents a concentrated release of intensifying supply-demand contradictions. Holiday factors amplified producers' urgency to clear inventory, the rapid rise and fall of PO prices exacerbated volatility in market sentiment, and long-term weakness in end-user demand formed the underlying reason why prices struggled to find effective support. In the short term, the market remains under pressure. After the holidays, close attention should be paid to changes in factory operational status and downstream restocking rhythms.
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