5,5‑Dimethylhydantoin

Market Intelligence on Recent Trends in 5,5-Dimethylhydantoin

I. Market Price Trends
1. Domestic Market
- East China: Prices are stable at 18,500-19,200 CNY/ton. Some traders are offering slight discounts for promotion, with actual transaction prices dropping to 18,300 CNY/ton.
- South China: Supported by essential downstream demand, prices are maintained at 18,800-19,500 CNY/ton. High-end quotes have slightly increased due to tight inventory.
- North China: Market transactions are sluggish, with prices ranging from 18,000-18,700 CNY/ton. Some factories have suspended quotes due to environmental production restrictions.

2. International Market
- Southeast Asia: CFR prices are stable at USD 2,550-2,650/ton. Indian demand has been delayed due to the monsoon season, reducing transaction activity.
- Europe and America: FOB prices are maintained at USD 2,700-2,800/ton. Due to rising energy costs, some European factories have strengthened their intention to raise prices.

II. Supply and Demand Fundamentals Analysis
1. Supply Side
- Domestic Capacity: The operating rate of major production enterprises is approximately 75%. Some factories in Shandong and Jiangsu regions are running at reduced capacity due to environmental inspections, reducing market supply by approximately 10%.
- Import Situation: The volume of imported cargo from Southeast Asia has decreased by 15% month-on-month. Port inventory has dropped to low levels, supporting domestic prices.

2. Demand Side
- Downstream Industries:
- Pharmaceutical Intermediates: Demand is stable, accounting for 45% of the total volume, but the procurement pace has slowed, focusing mainly on replenishing inventory as needed.
- Pesticide Intermediates: Demand accounts for 30%. Driven by autumn stockpiling, there is an expectation of short-term demand growth.
- Other Fields (e.g., Water Treatment Agents): Demand accounts for 25%, performing flat with no significant fluctuations.

III. Cost and Profit Analysis
1. Raw Material Costs
- Urea Price: The average domestic urea price has risen to 2,450 CNY/ton, a 3% month-on-month increase, increasing the cost of 5,5-Dimethylhydantoin by approximately 200 CNY/ton.
- Liquid Chlorine Price: The liquid chlorine market is operating weakly, with prices maintained at 300-400 CNY/ton, having limited impact on costs.

2. Industry Profit
- The current theoretical gross profit margin is approximately 18%-20%, down by 2 percentage points from last month, mainly due to the squeeze from rising urea prices.

IV. Relevant Policies and Industry Trends
1. Environmental Protection Policy: Environmental inspections in Shandong and Jiangsu regions have become stricter, leading to production restrictions for some factories and tightening short-term supply.
2. Export Policy: The export tax rebate policy remains unchanged. Enterprises' export enthusiasm is maintained, but weak Southeast Asian demand is suppressing export volumes.
3. Industry News: A major domestic leading enterprise plans to add 5,000 tons/year of production capacity, expected to come online in Q2 2024, which may increase long-term supply pressure.

V. Analysis, Judgment, and Forecast
1. Short-term (1-2 weeks)
- Price Trend: Domestic prices are expected to remain stable with a slightly firm tone. Prices in East China and South China may rise by 50-100 CNY/ton due to supply tightness.
- Driving Factors: Reduced supply due to environmental production restrictions, coupled with the release of autumn stockpiling demand from the downstream pesticide industry.

2. Medium-term (1-3 months)
- Price Trend: Affected by high-level urea prices and expectations of new capacity coming online, prices may first rise and then fall, with an expected fluctuation range of 18,000-19,500 CNY/ton.
- Risk Points: If urea prices pull back or downstream procurement pace slows, prices may face downward pressure.

3. Long-term (3-6 months)
- Price Trend: After the release of new capacity, the risk of market oversupply will increase, and prices may gradually decline to 17,500-18,500 CNY/ton.
- Key Points to Watch: Urea price trends, the intensity of environmental policy enforcement, and changes in export demand.