Dimethyl Carbonate Market Continues to Decline: Sufficient Profit Margins and Inventory Pressure Lead to Significant Weekly Drop

This week, the domestic dimethyl carbonate (DMC) market continued its downward trend, with no signs of recovery. On the cost side, the price of feedstock propylene oxide (PO) weakened simultaneously, further diminishing cost support for DMC. Although production cost pressures eased slightly for manufacturers, the price-supporting sentiment remained insufficient. On the supply side, the restart of the Shandong Wells facility increased market supply again, leading to ample product circulation and exacerbating expectations of supply-demand imbalance. On the demand side, despite the approaching holiday, midstream and downstream users showed weak pre-holiday stockpiling demand. Under the backdrop of ample supply and declining prices, most adopted a wait-and-see approach, purchasing only for immediate needs. Overall, weak cost support, increased supply, and sluggish demand jointly contributed to the weak operating pattern of the DMC market this week.

This period's demand was characterized by poor stockpiling, with generally low actual purchasing activity, failing to provide effective market support. At the same time, market supply continued to increase, gradually intensifying product circulation pressure. Cost performance was also weak, with price centers continuously moving lower, further dragging down overall market sentiment. Consequently, factory quotes were generally reduced, with a clear intention to lower prices to stimulate sales, pushing down the focus of actual transaction negotiations. In summary, the market faces pressure from rising supply, weak demand, and diminishing cost support in the short term, resulting in a subdued trading atmosphere.

However, guided by news that major suppliers were actively destocking, the market began to accelerate its decline.

"This period, the profit for the PO transesterification method increased by 24.43% month-on-month, as the price of propylene oxide fell during the week, while DMC and propylene glycol prices declined slowly; The profit for the EO transesterification method remained high but stable, with DMC prices falling, ethylene glycol prices fluctuating narrowly, and feedstock ethylene oxide remaining high, leading to an 18.94% decrease in profit month-on-month; The profit for the methanol oxidative carbonylation method decreased by 123.46% compared to last week, due to rising feedstock methanol prices and falling DMC prices."

Table 1: Theoretical Weekly Profit Changes for Various DMC Production Processes (RMB/ton)

| Product | Current Period Avg | Previous Period Avg | Change Value | Change | Next Period Trend |
| :--- | :--- | :--- | :--- | :--- | :--- |
| PO Transesterification | 354.5 | 267.9 | 86.6 | 24.43% | ↑ |
| EO Transesterification | -1641.1 | -1330.2 | -310.9 | -18.94% | ↓ |
| Methanol Oxidative Carbonylation | -221.7 | 52 | -273.7 | -123.46% | ↓ |

Source: chempricehub Information

Short-term Market Seeking a Bottom, Subsequent Rebound Momentum Requires Fundamental Support

At present, the ample supply of DMC and hindered demand transmission are deepening the fundamental contradiction. Especially with suppliers holding inventories, there is periodic pressure to transfer inventory through sales.

Table 2: Capacity Utilization Rates of Key Downstream Sectors

| Product | Current Period | Previous Period | Change | Next Period Direction |
| :--- | :--- | :--- | :--- | :--- |
| Dimethyl Carbonate | 58.26% | 54.39% | +3.87 pp | ↑ |
| Propylene Oxide | 71.70% | 71.30% | +0.4 pp | ↗ |
| Polycarbonate (PC) | 70.46% | 79.65% | -9.19 pp | ↓ |
| Ethyl Methyl Carbonate (EMC) | 26.67% | 22.00% | +4.67 pp | ↑ |

Source: chempricehub Information

This week, domestic PC industry output decreased compared to the previous period. Domestic PC output was 58,300 tons, down 7,600 tons or 11.53% from the previous period, with a capacity utilization rate of 70.46%, down 9.19 pp from the previous period. This week, one production line at Luxi Chemical's PC plant remained shut for maintenance, and Covestro's PC plant was fully shut for maintenance. However, Shengtong Juyuan's PC plant resumed operations to 90% capacity. Overall operating loads of other domestic PC plants showed no significant change from the previous period. Netting these factors, domestic PC industry output and capacity utilization both declined compared to the previous period (Note: From 2026, domestic PC industry capacity is updated to 3.94 million tons/year).

The weekly capacity utilization for EMC was 26.57%, up 4.67 percentage points month-on-month. Restarts of plants at Shida and Haike led to an increase in capacity utilization. Downstream demand was mainly contract-based, with a lukewarm reaction in the domestic EMC market, and new contracts are being executed. The weekly capacity utilization for EMC is expected to fluctuate narrowly in the next period.

Summary

DMC supply is expected to remain relatively stable in the next period. Key aspects to monitor are:

1. Supply Side: Overall market supply is expected to be ample in the next period. Plant operating rates are generally stable. Some plants that were previously under maintenance may resume operations sequentially, but new capacity release is limited. Continuous monitoring of plant operations and recent adjustment updates is advised.
2. Demand Side: The major downstream industries, polycarbonate (PC) and ethyl methyl carbonate (EMC), currently show weak purchasing activity, resulting in a subdued trading atmosphere. Downstream users generally maintain purchases based on immediate needs with a weak willingness to build inventory. Short-term demand offers limited support for DMC prices.
3. Cost Side: The feedstock PO market is expected to show a consolidation pattern, with prices potentially rising slightly before stabilizing. Cost support exists but provides limited upward momentum.

In summary, the DMC market is expected to operate with stable supply in the next period. However, due to limited support from both demand and cost sides, market prices are likely to consolidate within a range.