Looking back at 2019, the main trend of the DMC market is still suppressed first and then increased. The price fluctuations throughout the year were obvious, and soaring and emergency stops are the norm. At the beginning of the year, the high price of 8700 RMB / ton at the end of 2018 was also the highest point in 2019. Prices fell almost all the way in the first quarter. In the second quarter of the year, some major factories supplied foreign trade orders, which led to a tightening of overall supply and a rebound in the market. However, the downstream prices were in conflict with high-priced raw materials. Under the factory’s risk aversion, overall prices remained low. Basically, the low price stalemate continued in the range of 5000-6000 RMB / ton, and once fell below the 5,000 RMB / ton mark in the middle, reaching the lowest point of the year at 4,900 RMB / ton. However, starting in the third quarter, the demand for testing of new equipment in the main downstream continued, coupled with the promotion of typhoon weather and the National Day embargo, the price of DMC surged, and it soared to 8,000 RMB / ton. Due to the rapid increase in prices, it is difficult for downstream demand to follow up. Starting in the fourth quarter, with the decline in downstream demand, the price fell rapidly again, and stopped at around the 5,000 RMB / ton mark.
National DMC output in 2019 is around 468,000 tons. The shrinkage of Lingzhou in Taizhou is filled by the increase of Zhongyan Red Quartet, and the operating rates of other factories this year are basically higher than last year, and the output has increased by about 8.58% year-on-year. At the end of this year, Shanxi Zhongke Hui’an 50,000 tons / year device and Chongqing Wansheng 60,000 tons / year device have been put into trial operation. According to the tracking information of Zhongyu Information, in Chongqing Wansheng test run, products are expected before the Spring Festival in 2020. Zhongke Hui’an is slower, but it is just around the corner. In the next two quarters, there will be Zhejiang Petrochemical with a production capacity of 100,000 tons / year, plus the remaining coal by-product DMC output. It is estimated that from 2020 to 2021, China’s annual output of DMC will reach about 550,000 tons.
In terms of downstream demand, due to the impact of environmental protection and poor end demand, the start-up of coatings, adhesives, pharmaceutical intermediates and other factories has been significantly reduced. In addition, the price of DMC tends to be high and replaceable. In order to save costs, the factory purchases cheaper products instead of DMC, and only pays attention when DMC is cheap. The main downstream of the current DMC market is polycarbonate, so the market and start-up of polycarbonate are closely linked to the DMC market. In addition to Shandong Lihuayi, Zhejiang Iron Gale, and Sichuan Lutianhua in 2019, domestic non-phosgene-based carbon accumulation devices also started operation at the end of the year in Ganning and Liyang Shengtong Juyuan. According to Zhongyu Info, in the past few years, the new capacity of polycarbonate is planned to be around 2.59 million tons, and some non-phosgene-based new carbonization plants do not have plans for supporting dimethyl carbonate units, and they still need to be mined. Next, more can drive the market demand for dimethyl carbonate. In addition, the gradual increase of the downstream lithium battery industry is encouraged by national policies, and its subsequent development is also worth looking forward to.
In terms of raw materials, the planned demand for propylene oxide downstream polyethers has increased. However, in the supply side some has put into production until the end of the year, and at the same time, the import supply is expected to be overhauled. It is expected that the market can be under tightly balanced supply, and the average price can be higher than 2019, which has certain support for the DMC market. In general, downstream demand and raw materials are relatively favorable in 2020, but the supply side also needs to pay attention to the impact of subsequent coal-based production capacity on the market. The overall DMC market in 2020 is expected to be relatively cautious and optimistic, and the dynamics of downstream carbon accumulation should be paid attention to.