Price trend

The dichloromethane market saw a "low-level rebound" in October, primarily driven by tightening supply. Prices experienced two boosts in mid-month and at the end of the month, but demand failed to provide strong support.

Early October: Weak post-holiday demand and inventory pressure led to a 1.73% price drop.

Mid-October: News of maintenance shutdowns and expectations of tighter supply drove prices up by 2.64%.

Late October: Supply eased, but demand lagged, causing prices to plummet by 3.29%, hitting a 13-year low.

End of October: Enterprises reduced operating rates to stabilize prices, leading to a strong market rebound of 4.25%.

As of October 30, the average price of bulk shipping in Shandong was 1,765 RMB/ton, a slight increase of 1.29% from the beginning of the month, but a sharp drop of 33.4% year-on-year, indicating that the market was still in a period of deep adjustment.

Analysis review

Supply side: Changes in supply were the key driver of market trends

In early and late October, the operating rate of the methane chloride industry was relatively high, and overall oversupply was the main reason for suppressing prices. However, news of plant maintenance in the middle and end of the month (such as the maintenance of the 240,000 tons/year plant in Shandong and the 160,000 tons/year plant in East China) effectively alleviated local supply pressure and supported two price rebounds.

Planned maintenance shutdowns in November (such as the Shandong 380,000-ton/year unit scheduled for rotating maintenance starting November 2nd and the East China 240,000-ton/year unit scheduled for maintenance in mid-November) will continue to exert a temporary contraction on supply, potentially supporting stronger prices. However, close attention needs to be paid to the implementation of these maintenance plans and the supply recovery resulting from the restart of existing units.

Cost Side: Cost Support Diverged

Raw material methanol: High port inventories, high supply, and weak demand suppressed upward price movement, resulting in an initial rise followed by a decline in methanol prices. As of October 30th, the benchmark price for methanol from the business information platform was 2,212 RMB/ton, a decrease of 1.14% from the beginning of the month. This weakened cost support for dichloromethane; while the price of another raw material, liquid chlorine, rose due to reduced supply and increased demand, providing mild bottom support.

Demand side: Purchasing was based on immediate needs, with little room for surprises

The overall lackluster demand was the fundamental reason limiting the extent of price increases. Downstream users maintain a "just-in-time" purchasing model, with low enthusiasm for sourcing. Although the main downstream sector, refrigerants, provides stable support, demand for dichloromethane in the pharmaceutical and adhesive sectors continues to be squeezed by substitutes due to environmental policies. A positive sign is that exports in September increased significantly by 39.75% month-on-month, which to some extent helped alleviate the pressure of domestic overcapacity.

Domestic demand in November is expected to continue the sluggish trend of October, with little prospect of significant demand growth across downstream sectors. Therefore, the performance of the export market will become even more crucial; maintaining its growth momentum will be a key factor in boosting market sentiment.

Market outlook

The dichloromethane market saw a sharp rebound in October, driven by supply-side factors, but weak demand limited the extent of the rebound. In November, the market will continue to oscillate between expectations of supply contraction and the reality of weak demand. Attention should be paid to plant operations and export conditions.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.