Deepening Supply-Demand Contradictions Drive Dimethyl Carbonate Market to Continue Weak Downward Trend

Introduction: This period, the domestic dimethyl carbonate (DMC) market continued its weak downward trend, with supply-demand contradictions deepening further and the overall market operating under pressure. On the supply side, industry output has consistently increased, resulting in ample circulating inventory and a gradual accumulation of factory stocks. Shipping pressures have risen compared to previous periods, prompting some manufacturers to flexibly adjust their offers to alleviate inventory burdens. On the demand side, terminal consumption has contracted, with weakened demand in the electrolyte solvent sector being particularly pronounced, failing to provide sufficient support to the market. Other downstream sectors largely maintained purchase-on-demand or essential needs-based procurement, with limited incremental buying unable to effectively absorb new supply. The imbalance between supply and demand has become more apparent; market sentiment is bearish, holders' willingness to discount for sales has increased, offer price centers have gradually shifted lower, negotiation space for actual transactions has widened, and most deals are concluded through negotiation. Overall, the short-term domestic DMC market still faces downward pressure. Future attention should be paid to changes in supply-side inventory, plant operational status, and the pace of downstream demand recovery.

Supply Side: Ample Inventory, Emerging Stock Pressure

The primary pressure on the DMC market this period continues to stem from the supply side. As industry output steadily increases, market circulation remains ample, and factory inventories are gradually accumulating, leading to higher shipping pressures than in previous periods. In this context, some manufacturers have flexibly adjusted their offers to ease inventory pressure, widening the discount margins in actual transactions. Supply-side growth has not only changed the tightness of market availability but also strengthened buyers' bargaining power. For holders, inventory accumulation means simultaneous increases in capital and storage costs, enhancing their willingness to sell compared to earlier periods. For plants, balancing continuous operation with inventory control is necessary; some enterprises are adjusting the pace of their offers to accelerate shipments. Overall, the loose supply pattern shows no signs of tightening in the short term, remaining a key factor suppressing market sentiment.

Demand Side: Electrolyte Solvent Sector Drags Significantly, Limited Growth in Other Downstream Sectors

In contrast to the steady increase in supply, demand performance remains weak. Terminal consumption has seen a certain degree of contraction, with demand weakening notably in the electrolyte solvent sector, providing insufficient support to the market. DMC plays a crucial role in the electrolyte solvent field; weakness in this sector directly undermines a major absorption channel for the market. Other downstream sectors have largely maintained purchase-on-demand or essential needs-based procurement, with limited overall purchasing increments struggling to effectively absorb new supply. Facing expectations of a market downturn, downstream enterprises have adopted cautious procurement strategies, focusing primarily on small orders and essential needs, with low stocking intent. Some buyers have shown stronger willingness to push prices down during actual transaction negotiations, further driving the center of market offers lower. The lack of significant incremental demand means that new supply cannot be effectively absorbed, thereby deepening the supply-demand contradiction.

Table 1: Capacity Utilization Rates of Key Upstream and Downstream Products

Data Source: Chempricehub Information

Market Sentiment: Bearish Outlook, Discounted Negotiations Become Mainstream

Affected by the supply-demand imbalance, market participants hold a bearish sentiment. Holders' willingness to discount for sales has increased, the center of market offers has gradually shifted lower, negotiation space for actual transactions has widened, and most deals rely heavily on negotiation. In current market trading, the tug-of-war between buyers and sellers has intensified. Sellers are generally willing to offer negotiation room based on quoted prices to promote shipments, while buyers, leveraging the environment of ample supply and weak demand, frequently engage in price-hunting inquiries. The downward shift in transaction centers is not due to a single factor but is the result of combined effects including increased supply, inventory accumulation, reduced demand, and bearish sentiment. As bearish sentiment spreads, some holders choose to discount early to lock in orders, further exacerbating downward price pressure. Overall, the current market lacks obvious bullish support, transactions are primarily based on actual negotiations, and price centers remain under pressure.

Outlook: Short-Term Downward Pressure Persists, Focus on Three Key Variables

Overall, the short-term domestic DMC market still faces certain downward pressure. Abundant supply-side inventory, accumulating stocks, and rising shipping pressures will continue to suppress the market in the short term. On the demand side, weakened demand in the electrolyte solvent sector is evident, while other downstream sectors focus on purchase-on-demand and essential needs, with limited purchasing increments unable to effectively absorb new supply. Against the backdrop of an increasingly apparent supply-demand imbalance, market sentiment remains bearish, holders show strong willingness to discount for sales, and the center of market offers may continue to face pressure.

Future attention should focus on three aspects: First, changes in supply-side inventory. If factory stocks continue to accumulate, shipping pressures will rise further, potentially increasing the frequency of flexible offer adjustments by manufacturers. Second, plant operational status. Plant startup and maintenance dynamics will directly impact market supply rhythms; any phased reduction in supply could provide some relief to market sentiment. Third, the pace of downstream demand recovery, especially changes in the electrolyte solvent sector and the intensity of essential needs-based purchasing in other downstream areas. If demand recovery falls short of expectations, the supply-demand contradiction will be difficult to alleviate significantly in the short term. In summary, the DMC market is currently in a weak adjustment phase. Short-term price centers may continue to decline, and market participants need to closely monitor marginal changes in both supply and demand sides and operate cautiously.