Price trend

Due to the reduction or shutdown of some devices, there was some support on the supply side in Shandong, and the enterprise's offer was stable with an upward trend. However, downstream demand was limited, and rigid procurement was the main focus. The supply-demand game suppressed the increase. According to the monitoring of the commodity market analysis system of SunSirs, as of July 14th, the average price of bulk dichloromethane in Shandong Province was 2,237.5 RMB/ton, with a weekly increase of 0.9% and a year-on-year decrease of 10.32%.   

Analysis of influencing factors

Supply side: Device load reduced and inventory decreased, supported prices 

Device dynamics: The overall industry production fell to around 70%, and supply was becoming tight. Due to equipment failure, the overall low load operation of methane chloride in Shandong Luxi continued to support the market. It is reported that the Dongyue plant had returned to normal, but the Jinling chemical plant had reduced its load by 60%, which supported the upward trend of prices in the region.

Inventory pressure: Enterprise inventory generally decreased, and downstream suppliers had made slight restocking in anticipation of price increases.

Cost side: methanol dropped, liquid chlorine rose,  cost support was insufficient

Methanol: Accumulated port inventory, weak demand, weak and volatile methanol market, bearish for dichloromethane cost support. As of July 14th, the benchmark price of methanol in SunSirs was 2,378.33 RMB/ton, a decrease of 1.84% during the week.

Liquid chlorine: The demand in the Shandong market was slowly recovering, and the price of liquid chlorine had slightly increased.   

On the demand side: seasonal suppression, with rigid procurement as the main focus

Dichloromethane is widely used and is often purchased at low prices and on demand. Part of the downstream (coatings, adhesives) were affected by high temperatures, rainy seasons, and environmental inspections, resulting in insufficient production and weak demand.

Refrigerants are still in the peak demand season, and the R32 domestic and foreign trade markets remained tight, with supply and demand dominating the market to maintain stability and explore growth. Under the high proportion of self-produced raw material dichloromethane enterprises and quota restrictions, the increase in external procurement was limited. The demand for dichloromethane was limited.

Market outlook

It is expected that the market supply will remain tight in the short term, and prices may continue to rise slightly. But there is no significant improvement in demand, and the increase is limited. It also need to pay attention to device dynamics, inventory changes, and downstream order follow-up.

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