Price trend: first rose and then fell, dominated by supply and demand game 

The price rose in early July (July 1-14):

Supply Tightening: Some Shandong enterprises shut down for maintenance due to equipment failures, causing the industry's overall operating rate to drop to around 70%, resulting in reduced market supply and low inventories.

Price Rose: Downstream suppliers, anticipating price increases, slightly restocked, pushing the average bulk price in Shandong to 2,237.5 RMB/ton, a monthly high and a 6.04% increase.

Declined in late July (July 15-28):

Supply recovery: Shutdown facilities were gradually restarted, and the industry's operating rate rebounded to 75%, increasing market supply.

Weak demand: Downstream suppliers resisted high prices and only purchased as essential needs, leading to accumulated inventories and downward pressure on prices. According to the SunSirs Commodity Market Analysis System, as of July 28, the average price of bulk dichloromethane in Shandong Province fell to 2,097 RMB/ton, a monthly decrease of 0.59%.

Analysis of Influencing Factors

Supply Side: Fluctuations in Installations Dominated Short-Term Market Trends

Installations Dynamics: Unplanned maintenance at the beginning of the month led to tight supply, but supply pressure eased in the latter half of the month as plants resumed operations. Plant loads in western Shandong were reportedly low, with Jinling Chemical operating at 90%, Jinling New Materials at 60%, Dongying Huatai at 75%, and Dongyue Chemical at 70%.

Inventory pressure: Low inventory levels supported price increases in the first half of the month, but weak demand in the second half led to inventory accumulation, suppressing prices.

Cost side: Prices of raw materials methanol and liquid chlorine both fell, providing insufficient support.

Methanol: Lack of supply and weak demand led to falling prices. As of July 28, the benchmark price of methanol on Sinochem was 2,399 RMB/ton, a 5.16% decrease for the month.

Liquid chlorine: Market demand in Shandong was recovering slowly, shifting the focus of liquid chlorine downward.

Impact: Cost support weakened, dichloromethane profit margins narrowed, and companies were more willing to reduce prices to ship more.

Demand side: Seasonal pressure, primarily driven by just-in-time purchases

Traditional downstream sectors (coatings, adhesives): Due to high temperatures, the rainy season, and environmental inspections, operating rates were low and demand was weak.

Refrigerant (R32): Production and sales were strong, but companies produced a high proportion of methylene chloride themselves, and external procurement was limited, resulting in insufficient market growth.

Overall purchasing model: downstream companies tended to replenish stocks when prices were low, and had low acceptance of high prices, which suppressed the room for price increases.

Market outlook: Supply and demand game continues, may maintain narrow fluctuations

The supply-demand dynamic is expected to continue in August. Without significant improvement on the demand side, prices may remain weak and fluctuate narrowly. However, if companies continue to reduce production and control output, the downward trend may be mitigated. Pay attention to plant conditions, inventory changes, and raw material price trends.

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