Stability in Dimethylacetamide Market Prices in China Amid Adverse Weather and Economic Challenges

Nanjing, China: The Dimethylacetamide market in China remains stable at a lower end this week affected by the adverse weather conditions impacting market sentiments. Torrential rains and heavy flooding have led authorities to warn of further flooding in other parts of the country. This situation has negatively affected the downstream construction sector, causing a decline in demand for Dimethylacetamide. Nonetheless, the Dimethylacetamide market has maintained stability due to the availability of sufficient stocks to meet the reduced demand.

In China, the Dimethylacetamide market is maintaining the stability in their trend at USD 1020/MT (FOB-Nanjing), during the week ending on 28th June 2024. Amid the disruptions in the market sentiments, the suppliers are hesitant to change their Dimethylacetamide quotations for local as well as international markets, hence they are continuing with their previous Dimethylacetamide quotations. Furthermore, foreign sales continued to expand but the growth rate was the lowest it had been in six months. In addition, a fall in employment eased as the number of firms expanding their workforce roughly equaled those reducing it, indicating a stabilization in the labor market. Meanwhile, backlogs of work increased for the fourth consecutive month, suggesting ongoing demand and potential delays in production or services.

Regarding the feedstock market, Dimethyl Amine is experiencing stability in its trend whereas, the Acetic Acid market is showcasing a declining pattern in its trend which is resulting in the fluctuating production cost of Dimethylacetamide. Furthermore, in terms of the downstream Construction sector, analysts anticipate that China will introduce additional policy support measures in the short term. A government pledge to increase fiscal stimulus is expected to stimulate domestic consumption. However, significant local government debt and deflationary pressures are dampening recovery prospects. Despite various measures implemented since last October, these challenges are tempering the expectations of investors and factory owners. Private sector investment grew by only 0.1% from January to May, a decline from the 0.3% growth observed in the first four months of the year. Additionally, the slump in property investment has worsened, exacerbating concerns about the overall economic outlook. Moreover, last month, China's central bank announced a re-lending program for affordable housing to accelerate the sales of unsold housing stock, aiming to better match supply with demand. The recent disasters have compounded these challenges, with direct economic losses estimated at 3.65 billion yuan (USD 503 million) in Jiaoling County and potentially reaching 1.06 billion yuan (USD 146 million) in Meixian District.

As per ChemAnalyst, the Dimethylacetamide market in China is anticipated to decline in the upcoming weeks due to the disruptions caused by the heavy rains resulting in floods and landslides. This might further lower the demand for Dimethylacetamide resulting in the pilling of the inventory levels and hence, the market players might reduce their quotations at the cost of their marginal profits.