1、 Price trend
In 2024, the price of DMF experienced ups and downs, with the lowest point occurring in August when the price broke through 4000 yuan/ton and the highest point in January when the price was around 4800 yuan/ton. Since entering 2024, the price of DMF has shown a continuous downward trend. Due to overcapacity and long-term losses of factories, the DMF market has continued to decline, and prices have hit a new low in three years. In the past three years, DMF production capacity has nearly doubled, and traditional downstream acceptance has been slow, leading to an increase in market supply surplus contradictions.
2、 Review of DMF Market in 2024
In recent years, the overall production capacity of DMF has doubled, and the situation of overcapacity is obvious. Especially in the past three years, the production capacity has increased from 910000 tons to 1.77 million tons, and the supply-demand contradiction has become apparent. However, the downstream industry has been slow to accept it, and the demand follow-up is continuously insufficient. The significant increase in production capacity has led to many enterprises stopping work and production to alleviate inventory pressure. In the first half of 2024, at the end of March and the beginning of April, the 120000 ton DMF plant in Guizhou was successfully put into operation, and other DMF plant projects are following suit. Oversupply has caused the market price of DMF to continue to decline, and many enterprises have stopped production. In July 2024, the operating rate of DMF decreased to about 50%, and the factory has been operating at a loss.
DMF market under pressure in the second half of 2024
September 2024 is the traditional peak season for DMF. After the sustained trend in the first half of the year, the mentality of industry players has increased their expectations for the second half of the year, hoping that the market will improve. However, DMF experienced a brief rise in September and then fell back again, with downstream demand increasing and inventory rapidly emptying, causing a slight rebound in DMF prices. In December, prices declined again. The overall DMF market in 2024 is not optimistic, and companies are under pressure to operate. The mentality of stopping production and production is becoming more intense, and factory profits are continuously compressed. They continue to maintain low operating rates, but still fail to raise prices, and the mentality of industry players is pessimistic.
3、 Industrial chain structure
DMF is a widely used chemical raw material and an excellent solvent with a wide range of applications. Its industrial chain structure includes three parts: upstream raw materials, midstream DMF production, and downstream applications. The upstream main raw materials include carbon monoxide, dimethylamine, methanol, liquid ammonia, and sodium sulfide. Through the chemical reaction of these raw materials, midstream product DMF is produced. Midstream DMF, as an important organic solvent, is widely used in downstream industries such as PU (polyurethane) coatings, electronics, pharmaceuticals, and intermediates. It plays an important role and has a wide range of applications in the fields of chemical engineering, electronics, and pharmaceuticals.
In the downstream demand structure of DMF, PU slurry is the largest downstream application of DMF, accounting for 59%. The terminal demand is for industries such as luggage, clothing, shoes, and hats, which are widely used in polyurethane coatings and synthetic leather. The electronics industry accounts for 20%, mainly used for electronic product manufacturing and processing, and the pharmaceutical industry accounts for 11%. DMF plays an important role as a solvent and reaction medium in drug synthesis, with intermediates accounting for 7%, used for synthesizing other chemical products, and other application areas accounting for 8%, covering multiple industries such as coatings, inks, and resins. Overall, PU slurry and the electronics industry are the main downstream markets for DMF, reflecting its importance in high-performance materials and high-tech manufacturing.
4、 Development Trends of DMF Market in 2025:
In terms of market demand
DMF, as an excellent solvent and important chemical raw material, is widely used in industries such as polyurethane (PU), electronics, synthetic fibers, pharmaceuticals, dyes, etc. Among them, DMF used in polyurethane (PU) slurry accounts for more than 60%. DMF’s end consumer products are mainly concentrated in clothing, shoes, hats, furniture, bags and other products. With the recovery of the economy, the textile and clothing industry has begun to recover, and the market price of PU slurry has begun to rise. Some industry insiders have pointed out that due to the overlap between most coal chemical products and petrochemical products, the price of coal chemical products will also rise to varying degrees due to the rise in raw oil prices.
Competitive landscape
At present, the market competition pattern of DMF is relatively stable, with concentrated production capacity and gradual elimination of small production capacity. Although new production capacity continues to be added, the competition pattern will be difficult to change in the short term. It is expected that several leading enterprises will continue to occupy the majority of the market share in 2025.
In terms of production capacity
In recent years, China’s DMF production capacity has been increasing year by year. From 2017 to 2023, the production capacity increased from 9.9 million tons to 1.72 million tons. Starting from 2024, the DMF operating rate has been relatively low. The peak of DMF operating rate was from 2018 to 2021, followed by a decreasing trend year by year. In 2024, the DMF operating rate continued to decrease at around 50%, and the overall industry is facing a situation of oversupply. It is expected that the overall market operating rate will remain the same this year in 2025, with the main focus on reducing inventory pressure. It is also possible to alleviate the situation of oversupply in the market by reducing production capacity. Overall, there is an urgent need to optimize capacity utilization and adjust market demand in 2025.
Expected increase in exports
In recent years, there have been significant fluctuations in DMF exports. Before 2020, the export status of DMF in China was relatively stable, but after 2021, there was a significant increase. The export volume in 2021 was 150000 tons, and the international market demand was relatively high, resulting in an increase in export volume. In 2022, the export volume decreased, reaching 130000 tons. In 2023, the export volume was 106000 tons, and it is expected to be around 140000 tons in 2024. However, the export volume in the past two years is far lower than that in 2021. From the development trend in recent years, it is expected that the export volume of DMF in 2025 will be comparable to that in 2024, with an estimated export volume of around 145000 tons.
In terms of consumption volume
Due to the overall fluctuation trend of apparent consumption in China’s DMF industry in recent years, the apparent consumption of DMF was 570000 tons in 2019, slightly declining to 528000 tons in 2020. With the recovery of the economy, the consumption rebounded to 639000 tons in 2021. The overall DMF market has performed well, with a significant increase in consumption. In 2022, the consumption decreased to 619000 tons due to insufficient demand, and the consumption decreased to 584000 tons in 2023. Overall, the Chinese DMF market has experienced significant fluctuations in the past few years, from being demanded to having overcapacity and oversupply. The current situation of oversupply is difficult to alleviate in the short term, and it is expected that the consumption will steadily increase in 2025. The supply side is loose, with an increase compared to 2024, but not too much.
Technical aspects
With the high attention paid by the country to environmental protection, environmental protection issues have become increasingly severe. Enterprises have strengthened their investment in green production technology, continuously promoted the high-end, green, and intelligent development of the chemical industry, discharged pollutants in the production process, improved resource utilization, eliminated outdated energy, increased productivity and reduced costs through technological innovation and improvement, thereby enhancing market competitiveness. It is expected that DMF will further improve in technology by 2025.
market prospect
In recent years, due to the oversupply of DMF production capacity in China, enterprises have turned their attention to the international market and actively developed export trade. The export volume of DMF is also relatively large. Currently, some foreign DMF production enterprises are planning to close their existing production facilities due to environmental protection, production costs, and other factors. This also provides an opportunity for China’s DMF production enterprises to develop foreign trade. It is expected that there will still be more than 100000 tons of exports in China every year by 2025. With the continuous development of downstream DMF products and the increasing demand gap abroad, China’s DMF will still have great development prospects. Overall, DMF is expected to steadily rise in 2025.
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