Lead: During this period, the domestic dimethyl carbonate (DMC) market exhibited a downward trend, with the quoted price focus from major producers generally declining. On the supply side, although the overall market supply decreased, spot circulation pressure remained significant. Some enterprises faced weak inventory digestion capabilities and demonstrated a strong willingness to ship, primarily adopting strategies to promote transactions. From the demand perspective, overall purchasing sentiment in downstream industries turned cautious, showing a pronounced wait-and-see attitude towards current quotations. Actual transactions remained predominantly driven by rigid demand, lacking support from concentrated volume releases.

I. Propylene Oxide Price Decline Weakens Cost Support

This period saw successive downward adjustments in the domestic propylene oxide (PO) market. Following last week's high-level sideways trend, support from both the raw material and demand sides weakened, leading to a gradual price relaxation and decline. This week, explicit downward adjustments further cooled market sentiment, with downstream players cautiously awaiting lower points and mostly reducing purchase volumes. As of today, sentiment in East China has moderately recovered. Coupled with factors such as unstable international conditions and propylene price increases, the market is experiencing narrow-range adjustments amid mixed bullish and bearish factors, showing a temporary stabilization trend.

PO supply decreased during the period: Jinling and Sanyue units resumed after short-term output reductions; Wanhua maintained reduced output; Shida's shutdown status continued; others remained stable. On the cost side, propylene prices fluctuated upward, while liquid chlorine rose first then fell, offering limited overall support. The chlorohydrin process maintained relatively good and substantial profitability. On the demand side, purchasing cooled during this week's downward phase, with most downstream players cautiously following up based on rigid demand. Recently, views diverged somewhat as the market showed temporary signs of easing and a wait-and-see mentality prevailed, resulting in generally lackluster new order performance.

II. Ample Supply, Limited Inventory Capacity for Some Plants

This period's total output was 46,000 tons, a decrease of 6.56 percentage points from the previous period, with a capacity utilization rate of 56.55%. Yulin Baijiarui and Shandong Zhuohang operated normally; Depu's technical renovation unit ran normally; Dongying Haike and Shida's Dongying production areas were shut down; Linhuan Coking was shut down; Hongsifang operated two lines; Inner Mongolia Shuangxin was shut down; Jingmen Yuanhan and Shanxi Yaxin operated normally; other units experienced minor fluctuations with negligible impact. Currently, all shutdowns for maintenance are carryovers from previous periods, mostly planned, with only a few units remaining idle.

III. Multi-Dimensional Manifestation of "Persistent Demand Constraints"

The main downstream sectors for domestic DMC are polycarbonate (PC) and ethyl methyl carbonate (EMC). Domestic PC production slightly decreased compared to the previous period. This period's domestic PC output was 71,800 tons, down by 0.02 million tons (0.28%) from the previous period, with a capacity utilization rate of 86.78%, a decrease of 0.24%. This week, Luxi Chemical's PC unit operated above 90% capacity, Zhejiang Petrochemical's PC unit reduced operation to around 90%, while other domestic PC units maintained overall stable operating rates compared to the previous period. Consequently, both domestic PC output and capacity utilization saw slight declines this week (Note: Domestic PC industry capacity updated to 3.94 million tons/year starting 2026). China's EMC weekly capacity utilization rate was 23.93%, down 0.57 percentage points week-on-week. Shutdowns at Shida, Haike's Dongying production area, and Shandong Lianhong contributed to the decline in capacity utilization. Downstream demand was primarily contract-based, and the domestic EMC market reaction was tepid, with new contract orders being executed.

IV. Mixed Raw Material Price Movements Across Processes, Varying Profit Performance

This period, profits for the PO transesterification process increased by 153.21% week-on-week, as PO prices weakened during the week, while DMC and propylene glycol prices stabilized or declined slightly, but to a lesser extent than the raw material cost decrease. Profits for the EO transesterification process declined significantly, down 75.5% week-on-week, due to falling DMC prices, narrow fluctuations in ethylene glycol prices, and rising raw material ethylene oxide costs. For the methanol oxidative carbonylation process, profits decreased week-on-week by 109.47%, as raw material methanol prices rose while DMC prices fell.

V. Range-Bound Fluctuations, Monitoring Cost-Side Changes

In summary, the current DMC market overall shows a stable-to-weak operating trend. The evolution of future market trends still requires comprehensive analysis from three fundamental dimensions: supply, demand, and cost.

1. Supply Side: Concurrent Operations and Maintenance, Overall Supply Remains High
   Post-holiday, the supply side presents a pattern of "localized increases and decreases." Specifically:

   • Restart Plans: Shida and Haike's production units in Dongying have clear plans for restarting or increasing operating rates, which will gradually restore output.
   • Maintenance Schedule: Jingmen Yuanhan plans a shutdown for maintenance.
   • Overall Assessment: The changes in the aforementioned units largely offset each other, resulting in limited overall change in total market supply. In the short term, industry operating rates will remain at medium-to-high levels, and pressure from the supply side is unlikely to ease significantly.

2. Demand Side: Rigid Demand Procurement Dominates, Downstream Wait-and-See Sentiment Prevails
   From the demand perspective, market performance is relatively weak, lacking strong drivers:

   • Procurement Pace: Key downstream sectors—electrolyte solvents and the PC industry—are currently adopting rigid demand procurement strategies, meaning small-batch, multi-frequency replenishment based on actual production schedules, with little concentrated stockpiling.
   • Sentiment: Most downstream enterprises are currently in a wait-and-see mode, cautious about future price trends and unwilling to bear excessive inventory risks. This keeps market transaction activity low, constraining price increases.

3. Cost Side: Firm Raw Material Prices, Sustained Cost Support
   The cost side remains the primary stabilizing factor for the current market:

   • Raw Material Performance: Upstream raw material (e.g., PO) prices remain firm, with no clear basis for a significant pullback in the short term.
   • Transmission Effect: Consequently, DMC producers face high raw material procurement costs, limiting their room for proactive price reductions. Therefore, cost factors provide substantive support to the price floor of DMC, slowing the pace of market decline to some extent.