Introduction:
During this cycle, the domestic dimethyl carbonate market showed an overall pattern of narrow fluctuations. Unlike earlier phases of unilateral declines or sharp volatility, the market entered a stage of phased consolidation this week, with limited room for price increases or decreases. A temporary balance has been struck after intense competition among three factors: costs, supply, and demand. The decline in upstream raw material prices weakened cost support. On the supply side, although inventory pressure varied among producers, overall supply remained ample. Meanwhile, the demand side saw a slight uptick in purchasing willingness due to a subtle “fear of rising prices” mentality. These three factors restrained each other, jointly shaping the narrow fluctuation pattern observed this cycle.

Cost Analysis: Propylene Oxide Prices Decline, Support Shifts from Strong to Weak
From a value chain transmission perspective, cost factors—specifically price trends of various raw materials—directly impact the production cost of dimethyl carbonate and corporate profit margins.

This cycle, the domestic propylene oxide market declined before stabilizing. In the early period, market supply and demand operated under a loose structure, with consecutive price declines failing to yield effective results. Downstream demand feedback indicated insufficient orders and reduced operating rates. Meanwhile, due to some negative margin scenarios, purchasing enthusiasm remained low. Although propylene oxide cost pressure continued to intensify, it could not offset the weak supply-demand dynamics. The market continued to negotiate sales and prices gradually fell. By mid-week, when prices in Shandong reached the 9,000 yuan/ton mark, the propylene oxide–propylene price became inverted. Producers in operation generally reduced loads and output, then released intentions to stabilize prices. Downstream players adopted a wait-and-see approach, gradually returning to purchase and transmitting demand downstream. After a demand increase and supply decrease, market trading picked up and stabilized.

This cycle, truck shipments from multiple storage areas performed poorly. Port methanol inventories continued to decline due to fewer external cargo arrivals, a phased reduction in domestic replenishment, and export ship loading supporting withdrawals. Fundamentally, tight import supply was met with domestic cargo supplementation, weak downstream demand, and relatively high exports. Both bullish and bearish factors existed, leading to a stalemate in the market. Prices oscillated and consolidated in line with market sentiment.

Supply Analysis: Uneven Inventory Pressure, Social Inventory Still Loose
On the supply side, the domestic dimethyl carbonate market this week displayed “ample total supply but structural divergence” characteristics.

First, in terms of total volume, supply declined this cycle, but the industry’s overall operating rate remained above 60%, keeping market circulating supply abundant. Some fluctuations occurred at Shandong Lihuayi’s unit. However, the steady commissioning of certain new capacity further increased supply pressure on the market. As a result, buyers had more options when purchasing, which to some extent curbed upward price momentum.

Demand Analysis: "Fear of Rising Prices" Drives Phased Recovery
Demand showed noteworthy changes this week, becoming a key factor preventing a major market decline. Although overall downstream demand and operating rates more or less decreased, end-users’ purchasing mentality—driven by “fear of rising prices” – led to early or moderate inventory replenishment.

After the previous period of consecutive drops in dimethyl carbonate prices, the market generally believed that current prices had entered a relatively low range. Some end-users and small-to-medium traders worried that prices might bottom out and rebound at any time, causing them to miss low-cost purchasing opportunities. Therefore, they shifted from the previous “buying on rising, not on falling” wait-and-see stance and began to release incremental orders beyond basic needs.

This procurement behavior driven by “fear of rising prices” did not fundamentally reverse the oversupply situation. However, in the short term, it did digest some social inventory and alleviate supply-side pressure. After sensing the improvement in downstream order-taking intentions, suppliers became less willing to offload inventories at low prices. Instead, they maintained quotes or offered small concessions, contributing to the stable, narrow fluctuation pattern seen this week.

Outlook: Narrow Consolidation to Continue
In summary, the domestic dimethyl carbonate market this cycle experienced narrow fluctuations under the intertwined influences of weakening cost support, ample overall supply, and a phased improvement in demand sentiment.

Looking ahead, this range-bound consolidation is expected to continue in the near term. On the cost side, whether propylene oxide prices can stabilize after falling is critical. If propylene oxide prices continue to decline, cost support for dimethyl carbonate will be further weakened, potentially causing its price center to shift slightly downward. Conversely, a rebound in propylene oxide would provide upward momentum for dimethyl carbonate. On the supply side, changes in producer inventory pressure are important. Close attention should be paid to the de-stocking pace of major producers and whether there are new unit maintenance or restart plans. If inventories continue to deplete, supply pressure relief would support a stable or slightly higher market; if inventories accumulate again, prices will face downward pressure. On the demand side, the sustainability of downstream restocking is the biggest uncertainty. If the “fear of rising prices” sentiment among end-users continues to ferment, driving more basic needs and restocking demand, market confidence will be boosted. If downstream returns to a wait-and-see stance after completing phased restocking, demand will return to tepid levels, and the market will face a situation with quoted prices but no actual transactions.