Market Overview: The strong support before the holiday was breached, and the market reversed its upward trend and fell

In February 2026, the dichloromethane market exhibited a clear trend of "strong in the first ten days and weak in the middle ten days." In the first ten days, the market continued its upward trend, supported by high costs and reduced supply, and market sentiment was relatively strong. However, in the middle of the month (starting from February 10), the situation changed abruptly. Major manufacturers in Shandong Province collectively and significantly reduced their ex-factory prices, causing the spot market to turn from strong to weak, and the confidence in maintaining prices accumulated before the holiday quickly collapsed.

According to data from SunSirs' commodity market analysis system, as of February 12, the price of  bulk dichloromethane in Shandong Province was 1,785 RMB/ton, a decrease of 1.51% from the beginning of the month and a decrease of 30.61% year-on-year.

On the cost side: Liquid chlorine prices had fallen from their highs, significantly weakening cost support

Liquid chlorine: Before the holiday, the Shandong liquid chlorine market saw a rapid decline in ex-factory prices from a high of 300-450 RMB/ton to 1-100 RMB/ton due to stable operation of chlor-alkali plants and strong downward pressure on prices from downstream users. This precipitous drop in liquid chlorine prices directly weakened the cost support floor for methane chloride producers, providing them with room to lower prices and offer concessions.

Methanol: Methanol prices fluctuated narrowly before the holiday. Although positive factors in the international market provided some support for the long term, spot market follow-through was limited. On February 12, the benchmark price of methanol on SunSirs was 2,221.67 RMB/ton, a decrease of 1.91% compared to the beginning of the month.

Supply side: Reduced production capacity was insufficient to offset inventory buildup; destocking became the top priority

In Shandong, some major production facilities maintained reduced operating rates, with the industry's overall operating rate at approximately 75%. However, the reduction in operating rates was insufficient to offset the shrinking demand, and enterprise inventories generally rose to medium-to-high levels, with some enterprises facing significant inventory pressure. Producers have shifted their mindset from "holding prices and waiting for increases" to "lowering prices to maintain volume," with proactively reducing inventory becoming a primary objective. With a strong desire to ship, many producers have proactively lowered prices to promote sales, with drops exceeding 8%.

On the demand side: Inventory building ended earlier than in previous years, and new orders were severely lacking

With the Spring Festival approaching, downstream enterprises and traders have basically completed their pre-holiday stockpiling, and most end-users have entered a state of shutdown. Only a few large factories maintain purchases based on immediate needs, and new orders were weak. Demand was lower than expected, which is the fundamental reason for the reversal of this round of market conditions.

Market outlook

The market will be weak and volatile after the Spring Festival, with continued downward momentum. The hidden inventory accumulated before the holiday needs time to be digested, while downstream purchasing intentions are unlikely to recover in the short term. If liquid chlorine prices do not experience a precipitous drop, costs will limit further declines, but a rebound lacks impetus. Whether the market can stabilize in March depends entirely on whether companies are willing to offset weak demand with substantial production cuts. Changes in costs also need to be monitored.

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