Throughout February 2024, the Chinese market for Dipropylene Glycol Monomethyl Ether (DPM) experienced an ongoing upward trajectory driven by a scarcity in supply and reinforced cost support originating from feedstock propylene oxide and methanol. The pricing dynamics of DPM were significantly impacted by shortages in the raw material propylene, a consequence of maintenance operations at various plants during the spring festival. Additionally, the production costs of DPM were further affected by uncertainties related to upstream crude oil, influenced by the ongoing Middle East ceasefire.

In the terms of supply, the Chinese DPM market has witnessed a consistent upward trend, driven by low inventory levels and a scarcity of raw materials. This stable ascent was primarily shaped by maintenance shutdowns affecting various feedstock Propylene units during the Chinese New Year. Prominent units, including SINOPEC Guangzhou Company, Sinopec Yangzi Petrochemical, Sinopec KPC PC JV, Sinopec Sabic Tianjin PC, Sinopec Maoming Petrochemical Company, Sinopec Zhongke Refinery and Petrochemical, Sinopec-SK Wuhan PC, and Sinopec Zhenhai Refining and Chemical Company, underwent maintenance from 8th February to 17th February, leading to a shortage of raw materials and subsequent DPM price increases. Furthermore, the ongoing uncertainty surrounding upstream crude oil, influenced by the Middle East ceasefire, has added to the production costs of DPM. The persistent attacks by Houthi rebels in the Red Sea are causing delays and escalating freight costs for maritime shipments originating in the Middle East.

In the Chinese domestic market, the demand for industrial cleaners and detergent products from downstream sectors is holding at a moderate level, as reported by the Unilever. Simultaneously, the construction sector is experiencing low demand due to sluggish home sales during the lunar year. However, the demand from importing nations like India remains robust. This is propelled by a steady demand from the construction and automotive sectors in India. The vigorous growth of India's manufacturing industry, characterized by rapid expansion fueled by increased global demand and lower inflationary pressures, has contributed to a moderate rise in paint and coating demand within the Indian automobile sector. Monthly sales data confirms a continuous uptick in sales for Indian automakers, particularly in two-wheelers and utility vehicles, thereby sustaining the consistent increase in DPM prices in the domestic market of India, ensuring the health of DPM prices in China. As of February 2024, the price of DPM in the Chinese market stands at USD 1535/MT FOB Qingdao.

According to ChemAnalyst, anticipation of a continuous increase in DPM prices in China is foreseen, driven by the persistent situation in the Red Sea that is expected to impact the production cost of DPM. Moreover, there is visible recovery in the domestic market, bolstered by the Chinese government's initiatives to boost the real estate sector. This has resulted in an upswing in demand for DPM, particularly in the paint and coating segment.