Price trend:

According to data from the SunSirs' commodity market analysis system, as of November 7th, the average price of bulk dichloromethane in Shandong Province was 1,910 RMB/ton, a 6.26% increase from the beginning of the month, successfully halting its decline and rebounding. However, compared to the same period last year, prices had still fallen sharply by 33.8%, reflecting that although the market had seen short-term positive developments, the overall weak trend had not fundamentally reversed. In early November, the dichloromethane market attempted to emerge from its weakness driven by supply contraction, but weak demand limited the potential for price increases.

Market Analysis

Supply side: Supply contraction was the main driver of rising prices

The operating rate of the domestic methane chloride industry declined significantly, with many major companies frequently shutting down or reducing their operating rates. The overall industry operating rate dropped to around 65%, and company inventories had consequently fallen to low levels. This relaxed operating environment had provided a solid foundation for supporting prices in the market.

The operational status of the company's facilities was as follows:

Demand side: Insufficient demand limited market upside potential

In stark contrast to the booming supply side, demand remained sluggish. Overall demand was weak, with downstream industries generally holding high levels of inventory, limiting their ability and willingness to purchase. Market transactions were primarily driven by rigid demand, with traders and downstream factories showing little interest in pursuing higher prices. Therefore, although reduced supply had pushed up prices, the lack of substantial increase in actual demand meant the foundation for price increases was not solid.

On the cost side: Raw material prices were diverging, with limited overall support

Methanol: As a primary raw material, the methanol market faced continued downward pressure from high port inventories, high supply, and weak demand. As of November 7th, the benchmark price of methanol from SunSirs was 2,155 RMB/ton, a decrease of 2.78% during the period. Although recent expectations of reduced supply had led to a slight price rebound, the wide-range fluctuations at low levels had weakened the key cost support for dichloromethane.

Liquid chlorine: The price of liquid chlorine in Shandong Province first fell and then rose, with overall shipments being acceptable, providing mild bottom support for dichloromethane.

Market outlook

The dichloromethane market rebounded in early November, driven by proactive production cuts. In the short term, the tight supply situation is expected to continue, providing support for prices, and the market may maintain a slightly bullish and volatile trend. However, further price increases require support from the demand side. If downstream inventories are not effectively digested, the sustainability of the price increase will be challenged.

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