Quarterly Update on Global Dimethylformamide (DMF) Market
For the Quarter Ending June 2021
Supply in the North American region improved as the industrial infrastructure in the US Gulf Coast recovered from the devastating impact of the polar winter storm. However, the pricing trend of the Dimethyl Formamide marginally improved buoyed by the additional cost support from key feedstocks. Demand remained continuous from the printing inks and dye industries as the mass vaccination programme amplified the public movement in the regional domestic market leading to an overall improvement in economic activities.
Southeast Asian Dimethyl Formamide market remained under pressure as major economies in the region were severely impacted with the second wave of the COVID. In the spot market the wait and see approach strengthened due to reluctant approach among buyers amidst the hovering uncertainties in the Indian domestic market. Due to existing market uncertainties, upstream producers reduced the operating rates to 70% in May. However, demand outlook stabilized in the second half as the market picked up pace due to ease in containment restrictions in several parts in India. The pricing trend continuously observed a downward stride since February with discussions at Ex-Depot Mumbai settling at USD 2380 per tonne in June.
Ease in the imports of Dimethyl Formamide from the US improved the operating rates in several manufacturing facilities which further improved the supplies in the European region in the quarter. However, some constraints were witnessed in the second half as buyers restrained to procure the feedstock due to high prices. Demand surged from the paint, inks and dye industries as the mass vaccination programmes amplified the public movement in the regional domestic market.
For the Quarter Ending March 2021
During the first quarter of 2021, tight availability of the upstream Methanol took a toll over the DMF manufacturing, thereby creating supply shortage of DMF in the North American market. The supply disruptions were largely caused by the winter polar storm in the Texas and nearby Gulf region. About 90% of the Methanol production remained halted, thereby minimizing the throughput in DMF production, as the regional industrial infrastructure collapsed amid the raging storm. Demand surged from the downstream pharmaceutical sector with spot buyers becoming more flexible towards the Asian supplies as the domestic prices of DMF skyrocketed in the region.
The supplies were tight in the Asia pacific market in the first quarter of 2021. Owing to the plant low inventories level at the manufacturing facilities in second half caused by the plant turnaround amid the Chinese lunar New Year holidays, with the regional supplies further reduced by lack of imports from USA. Amidst short supply and strong global demand, price of dimethylformamide (DMF) reported record-breaking highs in March. Supply remained tight as Chinese inventories dropped to unprecedented levels amidst strong pharma demand which carried strong market prospects. A supplier from China reported delayed shipments to the Indian and other export markets due to container shortages. FOB Shanghai price in March was around USD 1765 per tonne, showing m-o-m increment of 6.5%.
In Europe, DMF supplies were tight during the first quarter, owing to persistent shortages reported in the upstream Methanol supplies. The imports from the USA were hampered due to several plant outages amid the polar storm, whereas a significant impact was witnessed as the Asian supplies were delayed due to the blockage of Suez Canal during quarter ending. The northwestern regional plants were operated at reduced efficiencies due to the shortage of raw material and disrupted transportation route amid the severe winter season. Demand surged as the offtakes were strong from the downstream pharma sector.
For the Quarter Ending December 2020
In Q4 2020, the demand for Dimethylformamide (DMF) surged due to revival in consumption of DMF from agrochemical sector. Several Asian countries including India began to import DMF to fulfill the growing demand from downstream pharmaceutical and agrochemical sectors after the ease in restriction by the government. Jiangshan in China imposed a temporary turnaround in its DMF production unit during the first of Q4 to assimilate its existing inventory. The demand-supply equilibrium of the region dwindled in countries like China and South Korea, as the manufacturers’ inventories depleted in the second half of Q4, resulting in the substantial hike in prices of DMF. Consequently, DMF prices averaged around USD 1570 per MT in Southeast Asia during Q4 2020.
In the fourth quarter of 2020, Dimethylformamide prices maintained a constant uptrend, due to tight supply with improvement in its domestic as well as export offtakes. Followed by the surge in upstream prices, DMF prices witnessed multifold increment on contract prices. However, several unplanned and planned maintenance shutdowns, kept the DMF supply snug throughout the quarter in the European region. In Q4, regional manufacturers experienced rich market fundamentals despite looming uncertainties, caused by the second lockdown imposed at several part in the region under the fears of new strains of Coronavirus.
Supply of Dimethyl Formamide were constrained in the Q4, due to the outbreak of several Hurricane in the US gulf region, which caused temporary disruptions in the US’ power supply. Eastman Chemicals, one of the largest producers of DMF reported a decline in Dimethyl Formamide production due to disruptions in the power supply caused during the Hurricane season. Many other manufacturing facilities were heard announcing temporary turnarounds at their production units, exacerbating the supply constraints. Some units were not able to resume production until the end of February thus creating a significant demand-supply gap, which consequently affected the prices of DMF and its downstream derivatives in the regional market.