Dimethyl terephthalate

Market Dynamics Intelligence on Dimethyl Terephthalate (DMT)

I. Price Trends
1. Domestic Market:
- The domestic price of dimethyl terephthalate (DMT) has shown a slight upward fluctuation recently, with a weekly increase of approximately 2%-3%.
- The main transaction price in the East China region ranges from 8,500 to 8,800 RMB/ton, while prices in the South China region are slightly higher, ranging from 8,700 to 9,000 RMB/ton.
- Price fluctuations are primarily driven by raw material costs and support from downstream polyester industry demand.

2. International Market:
- Prices in the Asian market (FOB China) remain stable at $1,100-$1,150/ton, while prices in the European market (FOB Rotterdam) are approximately $1,120-$1,250/ton.
- International prices are influenced by crude oil price volatility and exchange rates, maintaining an overall range-bound oscillation.

II. Supply and Demand Dynamics
1. Supply Side:
- The operating rate of domestic DMT production units is approximately 75%, an increase of 5 percentage points compared to last month, mainly due to the restart of some units that were under maintenance.
- Import volumes decreased by 10% month-on-month, mainly because of tightened supply in Southeast Asia and reduced arrival of cargoes.
- Inventory levels are moderate, with East China inventories at approximately 12,000 tons, a decrease of 8% from the previous week.

2. Demand Side:
- The operating rate of the downstream polyester industry remains high (approximately 88%), ensuring stable demand for DMT.
- Increased orders in the terminal textile and packaging sectors are driving positive demand trends in the polyester value chain.
- The strengthening prices of substitute PTA have led some downstream enterprises to shift their procurement to DMT, further boosting demand.

III. Costs and Profits
1. Raw Material Costs:
- The price of the primary raw material, p-xylene (PX), continues to rise, with a weekly increase of approximately 4%, pushing up DMT costs.
- Acetic acid prices remain stable, having a limited impact on DMT costs.

2. Production Profits:
- The profit margin for DMT production is compressed, with a current gross margin of approximately 5%-7%, a decrease of 2 percentage points from last month.
- Under cost pressure, some enterprises plan to raise quoted prices to pass on costs.

IV. Relevant Policies and Industry Dynamics
1. Policy Impact:
- Stricter domestic environmental policies are putting pressure on some small and medium-sized DMT producers to reduce production or halt operations.
- Adjustments to export tax rebate policies have limited impact on DMT exports; enterprises are focusing more on domestic market demand.

2. Industry Dynamics:
- New capacity in the downstream polyester industry is gradually being released, and DMT demand is expected to increase by 5%-8% in the next three months.
- Tight DMT supply in Southeast Asia presents more export opportunities for China, although rising international freight costs partially offset this advantage.

V. Analysis and Forecast
1. Short-term (1-2 weeks):
- Prices are expected to maintain an oscillating upward trend, supported by PX prices and robust downstream demand.
- The rate of increase may slow to 1%-2% as some downstream enterprises show resistance to high prices.

2. Medium-term (1-3 months):
- If PX prices continue to rise, cost pressures on DMT will further transmit downstream, potentially pushing prices above 9,000 RMB/ton.
- Attention should be paid to changes in the operating rate of the polyester industry; if demand weakens, prices may correct downward.

3. Long-term (3-6 months):
- The commissioning of new DMT capacity in the second half of 2024 may alleviate supply tightness, putting downward pressure on prices.
- It is recommended to monitor the price trends of raw material PX and the seasonal changes in downstream polyester industry demand.

VI. Risk Warnings
1. Significant fluctuations in crude oil prices may affect PX and DMT costs.
2. The operating rate of the downstream polyester industry may fall short of expectations, leading to weakened demand.
3. The impact of international trade friction or exchange rate volatility on the export market.