Decline in the purchasing activities and slow market offtakes dampens the Global Dimethyl Amine prices

In First half of February, the global market for Dimethyl Amine experienced a challenging turn in its price, primarily driven by a decrease in the prices of key feedstocks such as Ammonia and Methanol. The mixed demand observed from downstream sectors, including Pharma, Agrochemical, Dyes, and Pigments, contributed to a reduction in overall demand for Dimethyl Amine, consequently impacting its market price for the month.

In the US market, the price of Dimethyl Amine experienced challenging turn in first half of February. This reduction is primarily attributed to the decrease in prices observed in the feedstock markets of Ammonia and Methanol. The downward trajectory in pricing is consistent with challenging economic indicators in Texas, USA, as reported by the Federal Reserve Bank of Dallas. The general business activity index for manufacturing in Texas plummeted by 17 points to -27.4 in January 2024, marking its lowest level in eight months and suggesting a deeper contraction in manufacturing activities. Despite the challenging economic conditions, the demand for Dimethyl Amine from downstream markets, particularly in the pharmaceutical and personal care sectors, has exhibited significant growth. The mixed demand in the downstream market, coupled with lower raw material prices and ample inventory availability, has contributed to the decline in Dimethyl Amine prices this month.

In the European market, The Hamburg Commercial Bank reported promising signs of resurgence in the German chemicals sector, noting a notable deceleration in the decline of received orders. Although the Purchasing Managers' Index (PMI) lingered at a dismal level, there was a significant leap toward the expansion mark of 50, indicating a slight improvement in order intakes in the cyclical chemicals sector. This progress is considered encouraging and is viewed positively for the export sector, particularly amidst geopolitical challenges. Challenges include attacks by Houthi rebels on commercial vessels in the Red Sea, leading to longer routes around South Africa and substantial delivery delays, notably impacting voyages to Europe. In the European market, the demand for Dimethyl Amine from downstream sectors, including pharmaceuticals, personal care, dyes and pigments, and agrochemicals, experienced subdued demand. Chemical exporters noted signs of a turnaround in global manufacturing sector demand, partly attributed to customer restocking.

ChemAnalyst anticipates a bearish momentum in the upcoming sessions for the price of Dimethyl Amine. This expectation is rooted in favorable feedstock prices that are poised to impact Dimethyl Amine production in a cost-effective manner. Although the Asian market is projected to witness a surge in Dimethyl Amine prices, major industries express optimism regarding positive momentum in demand. Anticipated increases in production and orders, driven by economic improvements, are expected to lead to positive outperformance in various downstream sectors. This positive trend is likely to influence the overall demand for Dimethyl Amine in the market. The confluence of favorable feedstock prices, economic improvement, and heightened production levels is expected to contribute to the bearish momentum in the Dimethyl Amine market.