Why is density a derived unit?

Density is a derived unit because it's not reported as a pure unit. (A pure unit would be something like kilograms or meters.) In contrast, the units for density are kg/m3. Density is the ratio of mass to volume; mass has the unit 'kilograms' (kg) and the unit for volume is cubic meters (m3).

Density is an intensive property, which means the amount of the material is irrelevant. The density of a substance is constant.

if one of the 7 exponents has value 1 and all others exponents are 0, then the unit being expressed is a base unit; otherwise it is a derived unit. Thus, for density we have: ... Density is mass divided by volume. Volume is already derived from length (measured in cubic meters - meter*meter*meter).