DMC market supply remains tight during the National Day holiday; plant inventories are low, and end-users are destocking.

Lead-in: During the holiday period, market participants gradually withdrew from trading and took leave. Downstream users focused on digesting existing inventory, resulting in weak willingness to enter the market. Trading activity in the spot market remained quiet. Prices are expected to remain relatively stable overall. Taking the Shandong market as an example, mainstream transaction prices ranged from 5,000 to 5,600 RMB/ton (acceptance delivery basis).

Unstable Units and Insufficient Supply Support Factory Pricing

During the holiday period, units at Shandong Weiersi and Deppu Phase III operated unstably, making it difficult to maintain normal operating loads, which led to a reduction in spot supply. Some factories primarily focused on fulfilling prior orders, leaving limited resources available for external sales, resulting in tight on-site supply. Meanwhile, reduced logistics efficiency during the holidays further hindered the circulation of goods, leaving few tradable spot resources in the market. Additionally, sustained export order volumes further contracted domestically available spot supplies, exacerbating the tight supply situation. China's dimethyl carbonate (DMC) production this month was 253,000 tons, a month-on-month increase of 18,000 tons (+7.66%). Although many units undergoing maintenance restarted, increasing overall on-site supply, most units experienced shutdowns or reduced loads towards the end of the month. Supported by prior orders, major producers held low inventories with no immediate sales pressure, showing little willingness to sell at low prices. Quotes remained firm. Rising raw material costs also increased production expenses; after alleviating loss pressures, factories exhibited clear reluctance to sell, prioritizing scheduled deliveries and actively pushing prices higher. Traders also had limited sellable inventory and, facing firm factory quotes, mostly adopted a wait-and-see approach or replenished only as needed. Low-priced spot resources were scarce, providing strong bottom support for prices from the supply side.

Downstream Inventory Digestion Leads to Weak Demand

From a demand structure perspective, before the holiday, battery electrolyte and polycarbonate (PC) served as the two main drivers. Increased production plans for power and energy storage batteries led to higher operating rates among electrolyte manufacturers, sustaining strong essential demand for battery-grade DMC. Due to certification barriers, capacity elasticity for battery-grade DMC is lower than for industrial-grade, leading to a widening premium. PC unit operations remained stable, continuously consuming DMC and providing consistent bulk demand support. In early September, downstream enterprises concentrated their pre-holiday stocking for the National Day break, amplifying short-term demand through centralized procurement, which became a key factor driving price increases before the holiday. Entering the holiday period, demand clearly weakened. End-users mainly focused on digesting pre-holiday stocked inventory, slowing procurement pace, with fewer new inquiries and transactions. Electrolyte solvent plants were still digesting their own raw material inventories and were extremely cautious about placing new DMC orders, maintaining only minimal replenishment based on essential needs.

Downstream sectors showed some resistance to the recent rapid price hikes. Some end-users had already completed phased stocking before the holiday, lacking the willingness to chase high prices in the short term. Simultaneously, ongoing fulfillment of foreign trade orders diverted part of the domestic spot resources, also suppressing the concentrated release of domestic demand to some extent.

In September, operating rates at Sichuan Tianhua, Luxi Chemical, Hubei Ganning, and a certain PC unit in East China all declined to varying degrees. Additionally, Wanhua Chemical's PC unit remained under maintenance in mid-to-late September. Overall, domestic PC industry capacity utilization and output decreased compared to the previous month. Domestic PC output was 266,000 tons, down 6.67% month-on-month and 9.98% year-on-year. Industry capacity utilization stood at 75.01%, down 2.77 percentage points from the previous period and 7.28 percentage points from the same time last year. (Note: Domestic PC output for September 2025 has been revised to 295,500 tons).

September output of ethyl methyl carbonate (EMC) units was 63,300 tons, an increase of 15,300 tons from the previous month. More units on-site restarted, leading to higher operating rates. The monthly capacity utilization rate was 35.5%, up 12.5 percentage points month-on-month.

Overall, holiday demand exhibited characteristics of "persistent essential demand, insufficient incremental growth, and cautious sentiment." Battery-grade carbonates maintained resilience supported by the new energy industry chain, but industrial-grade DMC saw seasonally weakening demand due to traditional downstream shutdowns during the holiday. The speed of end-user inventory digestion will directly impact post-holiday restocking intensity, while downstream acceptance of high-priced goods will be a key variable influencing market direction.

Post-Holiday Forecast

Table 1: October Changes in DMC Unit Operations (Unit: 10k tons)

Data Source: Chempricehub Information

In summary, post-holiday DMC trends will depend on the pace of supply recovery and downstream restocking demand. If the units listed above face uncertain and unstable restarts, the tight supply situation may persist. With no inventory pressure, factories' willingness to hold prices remains strong, making prices prone to rise rather than fall. However, expectations for improved demand are limited, downstream resistance to high prices persists, and digestion capacity improvements are constrained, suggesting the market may maintain an oversupply pattern, with prices likely under overall pressure. If units gradually recover and spot supply increases, but post-digestion restocking falls short of expectations, the market may accelerate its downward pressure. Short-term recommendations focus on monitoring changes in unit operations, the initiation of downstream restocking, and the pace of export order intake.