DMF: shipment pressure increased, and the market was weak and downward in March

Since March, the conflict between Russia and Ukraine has triggered a violent shock in international crude oil. With the rise and fall of crude oil, superimposed on the multi-point spread of domestic epidemic, and the upgrading of control measures in many places, it has inhibited logistics transportation and terminal consumption. The inventory level of some main domestic DMF production enterprises has increased, the intention of price reduction and shipment has increased, and the DMF market has entered a downward channel.

In terms of supply, the main factories started to operate normally in March, with an average monthly operating rate of around 71%, a narrow decline of 1% month on month, and little change in the overall supply side. In terms of inventory, affected by the local epidemic, the shipment speed of factories in the main production areas of Shandong slowed down and the inventory pressure increased. In addition, after the sharp rise in the price of recycled DMF in the early stage, the supply of recycled DMF in the market increased. Therefore, the overall supply of DMF in March was higher than that in February. In April, DMF plant has no device maintenance plan, and Henan Junhua 30000 T / a device storage and restart plan. There is no obvious positive support on the supply side.

In terms of exports, from January to February 2022, domestic DMF exports totaled 12570.99 tons, down 19.4% from the same period last year. Among them, the export in January was 8335.6 tons, a year-on-year decrease of 31.3%; February exports 4235.39 tons, down 31.2%. It can be seen that from January to February, the export volume of DMF decreased significantly year-on-year, and the export market performance was poor.

In terms of demand, after the lunar new year, supported by the rise in the price of recycled DMF and downstream slurry, the price of DMF was strong. However, the terminal cost pressure is high, there is resistance to high prices, the downward transmission of costs is not smooth, and the demand recovery is suppressed to some extent. In March, after the rapid rise of crude oil, the market uncertainty caused by the superposition of epidemic factors increased, and the construction in the downstream of the sealed and controlled area decreased. At the same time, it affected the transportation, further restrained the terminal demand, and gradually formed negative feedback to the supply side, so it dragged down the gradual decline of the market price.

At present, after the sharp decline of DMF price, with the reduction of profit, the continued decline intention of some enterprises with low inventory level is weakened, but the overall inventory pressure of manufacturers is uneven, or adjust the price according to their own shipment. In addition, the demand side change is still the main logic affecting the market. The impact of the current epidemic has delayed the expected delivery time of demand. At that time, we need to pay attention to the actual demand at the downstream and the inflection point of the epidemic. If the epidemic situation eases, enterprises may speed up replenishment and the downstream will also recover. Zhongyu information expects that the trend reversal of DMF market can occur only after the economic stabilization and the epidemic situation eases.