The price of Dimethyl Sulphate (DMS), a crucial chemical used in dyes and agrochemicals, witnessed a notable decline in the USA market throughout December 2023. This downturn can be attributed to a confluence of factors, including diminishing demand in key downstream sectors, oversupply in the domestic market, and falling feedstock prices. The DMS industry is navigating through a challenging landscape as it grapples with these bearish headwinds.

Amidst weakening demand in the United States, particularly in the textile and agrochemical sectors, the DMS market faces significant downward pressure. Consumers in the USA tightened their spending on textile and clothing purchases, leading to an excess of unsold merchandise and a subsequent reduction in demand for downstream dyes, consequently affecting the market for DMS. India's top agro-chemical producer, UPL Ltd, a company with a global presence, experienced a substantial drop in revenue from the American continent, contributing to the decrease in DMS prices. In the broader textile industry, as highlighted by the ITMF's 22nd Global Textile Industry Survey, participants exhibited a cautious sentiment in September 2023. The textile value chain is grappling with rising costs and weak demand. Despite a brief recovery in order intake in May 2023, the trend flattened in July and remained weak in September, reflecting the industry's struggle with minimal orders. Weakening demand, fueled by high inflation rates, has been a major concern for the global textile value chain.

Furthermore, the oversupply situation in the Indian domestic market has intensified the price decline, with distributors prioritizing destocking activities. The primary feedstock for DMS, Sulphuric acid, experienced a price dip in November, allowing manufacturers to decrease DMS prices while maintaining profitability. This cost reduction, coupled with the weak demand scenario, has contributed to a substantial decline in DMS prices in recent months. The trend is further exacerbated by decreasing shipping charges on the U.S. West Coast, adding to the overall downward trajectory.

As the USA Manufacturing Purchasing Managers' Index (PMI) dipped below 50 in November, indicating a contraction in the manufacturing sector, analysts expressed caution about the future trajectory of DMS prices. The decline in prices has been consistent, with notable drops of 4.6% in September, a significant 16% in October, and reaching USD 1577/MT in November. As the industry looks toward 2024, the ChemAnalyst estimation suggests a continued decline in DMS prices, contingent on the recovery of the U.S. economy and the textile sector, as well as resolving challenges in the global supply chain. The extent of the decline remains uncertain, dependent on the delicate balance between supply and demand dynamics in the DMS market.