Introduction: Entering the third week of September, the domestic dimethyl carbonate (DMC) market underwent a sudden shift in sentiment. At the beginning of the month, the market was immersed in an atmosphere of tight supply and accelerating price increases. However, within just a few days, the trend reversed downward, with declines widening. As of September 17, mainstream negotiated prices for Shandong were referenced at 6,150 RMB/ton (acceptance payment, ex-factory), East China fell to 6,250 RMB/ton (acceptance payment, delivered), and South China quoted at 6,350 RMB/ton (telegraphic transfer, delivered). Compared to the phase high of 6,500–6,600 RMB/ton from Shandong factories on September 11, the price center has clearly shifted downward. From "soaring momentum" to "persistent decline," the DMC market is experiencing a rapid reversal driven primarily by the supply side.
The concentrated realization of increased supply was the primary factor crushing this market cycle. During this period, the weekly capacity utilization rate for domestic DMC rose to 67.95%, an increase of 1.86 percentage points compared to the previous week, returning industry operating rates to a phase high. Changes at the plant level were particularly critical: Shandong Depu New Materials' 200,000 tons/year DMC project recently started up successfully and is currently running at full load. Meanwhile, Shandong Lihua Yi plants are gradually resuming production, and Ningxia Baofeng's 120,000 tons/year unit is operating normally after commissioning. The restart of previously maintained units combined with the release of new capacity created a superposition effect. This rapid expansion on the supply side significantly increased available spot goods, gradually undermining the core logic that previously supported prices through tight spot availability.
Changes in factory sentiment further amplified downward price pressure. With the National Day holiday approaching, major factories showed heightened concerns about inventory accumulation during the break. Against the backdrop of continuously rising industry operating rates, some factories chose to proactively lower quotes to stimulate downstream purchasing, attempting to destock before the holiday. Although this strategy is routine, in an environment of weak demand follow-through, price cuts did not lead to significant improvements in transactions. Instead, they exacerbated bearish market expectations, forming a negative feedback loop of "price cut—wait and see—further price cut."
A cautious stance on the demand side was another aspect keeping the market under pressure. Regarding key downstream sectors, while there is rigid demand in the electrolyte solvent field, end-user new energy market orders have been lackluster. Electrolyte producers have mostly focused on digesting existing long-term contract inventories, showing low enthusiasm for inquiries on new orders, with price suppression being widespread. In terms of polycarbonate (PC), end-users in appliances and construction materials are in their off-season; traders are operating cautiously, and overall transaction volume remains sluggish. The weekly capacity utilization rate for ethyl methyl carbonate (EMC) remained near a low level of 33%, providing limited pull-through for DMC. Amid persistent price declines, mid- and downstream participants exhibit strong wait-and-see attitudes, with most market entries limited to small-volume purchases based on rigid needs, resulting in a noticeably quiet trading atmosphere.
Cost-side support is also weakening at the margin. Recently, the price of raw material propylene oxide (PO) has softened, with Shandong ex-factory prices retreating from early-month highs. Propylene prices also declined during the same period, weakening the cost floor for DMC. In the PO transesterification process, raw material costs account for more than 60% of production costs. A decline in raw material prices means the cost support line for DMC shifts downward simultaneously, opening space for further price weakness.
Overall, the current DMC market is under triple pressure: "accelerated release of incremental supply, obvious lack of demand follow-through, and marginal weakening of cost support." In the short term, as loads on new units continue to climb and previously maintained units continue to recover, spot circulation volumes are expected to increase further. Downstream players are unlikely to engage in large-scale restocking amid a downward price channel, and the procurement rhythm of small-volume rigid-demand orders cannot reverse the imbalance between supply and demand. Negotiation centers may continue to shift downward, and the market will remain under pressure in the short term.
For the future outlook, attention should be paid to the following aspects: First, changes in factory inventories around the holiday; if inventory accumulation exceeds expectations, the intensity of promotional price cuts may increase further. Second, the pace of operating rate recovery in downstream electrolyte and PC industries; substantial recovery in end-user demand is the fundamental prerequisite for the market to stop falling and stabilize. Third, the deployment pace of new capacity and the start-up/shutdown dynamics of older units; marginal changes on the supply side will directly determine the depth and duration of price declines. Fourth, whether new export orders will increase again as prices adjust to reasonable levels.
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