Chinese Dimethylacetamide Market Faces Persistent Bearish Trends Amid the Weak Demand

Nanjing, China: The Dimethylacetamide (DMAc) market in China is currently stable but at a lower price point, reflecting bearish market sentiments. This bearishness is primarily driven by a reduction in production costs, which has resulted from declining prices of key feedstocks, Dimethyl Amine, and Acetic Acid. Additionally, the market is experiencing weak demand for Dimethylacetamide from major downstream sectors such as Pharmaceuticals and Construction, as these industries are underperforming, further dampening the overall market dynamics for DMAc.

During the week ending on 30th August, the Dimethylacetamide (DMAc) market in China remained stable at a lower price point of USD 960/MT (FOB-Nanjing). Export orders for Dimethylacetamide were subdued and experienced a decline, influenced by deteriorating external market conditions. Although purchasing activity decreased as well in August, this was largely due to Chinese manufacturers maintaining adequate input stock levels. Additionally, finished goods inventories for Dimethylacetamide increased, with reports indicating that delays in outbound shipments contributed to the buildup of post-production stock. Survey respondents attributed the decline in DMAc prices to the reduction in raw material costs, specifically Dimethyl Amine and Acetic Acid. As a result, Chinese manufacturers continued to lower their selling prices for Dimethylacetamide, with some offering discounts to stay competitive in the market. Business confidence in China also waned in August 2024, reflecting the overall bearish market sentiments. The narrowing spread between Dimethyl Amine, Acetic Acid, and DMAc further underscored the continued bearishness in the market.

The downstream Construction sector in China is facing significant challenges, as evidenced by a 19.7% year-on-year drop in new-home sales from the country's top 100 real estate companies in July, along with a 36.4% decline in transactions from June. This downturn has led to reduced demand for commodities, including Dimethylacetamide (DMAc), further exacerbating the bearish market conditions. In response to these struggles, at least 10 city governments have relaxed or eliminated new-home price guidance, allowing market demand to play a more prominent role, a move expected to push more real estate companies to lower prices. Additionally, China is considering a plan to allow homeowners to refinance up to $5.4 trillion in mortgages to reduce borrowing costs for millions of families and stimulate consumption. Although lower mortgage rates could impact the profitability of state-run banks, this initiative might offer some relief to the ailing real estate sector.

According to ChemAnalyst, the Dimethylacetamide (DMAc) market in China is expected to remain under pressure, with bearish market sentiments likely to persist. This outlook is driven by the continued weak performance of the downstream Construction and Pharmaceutical sectors, which is anticipated to further reduce demand for Dimethylacetamide and exert downward pressure on the market.