## Introduction

After the holiday season, the price of DMF has been fluctuating. In just one week, it went down by 500-600 yuan/ton and is currently stabilizing. The current situation of DMF market can be described as a dilemma between upward pressure from demand and downward pressure from profit.

## DMF Factory Operations

After the holiday, the operating rate of DMF factories in China has remained stable. The following factories are operating normally:

1. Xinlianxin in Jiangxi, Ruibo in Henan, Jiuyuan in Sichuan, and Jiutian in Anyang.
2. Hualu Hengsheng (600426) has been running on both lines for a long time, Riyue in Zhangqiu is running at reduced capacity, and Luyixi Phase II in Liaocheng is producing less due to reasons.
3. Xinghua in Shaanxi is operating at high capacity, while other facilities remain parked.

Overall, the industry's operating rate has increased by about 6% compared to before the holiday, and there is sufficient supply of spot goods in the market. However, due to manufacturers suspending production during the holiday while keeping the market closed, inventory pressure continues to rise.

## Demand Analysis

In terms of demand, although there were several price increases before the holiday, it did not directly break the atmosphere of pre-holiday stockpiling. Some downstream manufacturers are considering the transition from "Golden September and Silver October." It is expected that demand will gradually pick up during the holiday and manufacturers will prepare in advance by stocking up. However, the actual post-holiday situation is different. Very few orders were received during the holiday, and the shipment situation was even worse than expected. As a result, downstream manufacturers are still consuming the pre-holiday stockpiles. In addition, the supply of recycled DMF is abundant. Therefore, even if downstream manufacturers have temporary demand for restocking, it is very limited.

As the price continues to decline and approaches the cost line limit, it is also in line with the market's expectations. Some downstream industries have begun to seek lower prices for restocking, and speculators have also entered the market actively. This has led to the depletion of low-priced goods in the market, and the downward trend of the market has slowed down slightly, resulting in a small rebound. However, due to varying degrees of inventory pressure from major factories, the rebound in the market is not sustainable.

## Future Outlook

The DMF industry in China is still undergoing reshuffling. In mid-October, Hualu Jingzhou's 150,000 tons/year DMF unit will enter the market, which will bring the supply of spot goods to a peak. However, the growth rate of downstream demand is limited, and it is expected that the market supply-demand game will continue to intensify. In the short term, the domestic DMF market is expected to consolidate and operate within a range. As of October 13th, the main region prices for DMF in China are as follows: Shandong region at 5100-5200 yuan/ton, Jiangsu region at 5200-5300 yuan/ton, Zhejiang region at 5300-5400 yuan/ton, and Guangzhou region at 5400-5500 yuan/ton.