SunSirs: It is Expected that the Price of Dichloromethane will be Strong in the Short Term

Market overview

In early May, Shandong's dichloromethane market was under pressure and fell. Enterprises accumulated inventory, demand-side rigid demand purchases, market trading was sluggish, manufacturers continued to make concessions for shipments, and dichloromethane hit a five-year low again.

On May 13, the average price of dichloromethane bulk water in Shandong was 2,035 RMB/ton. Subsequently, the Sino-US tariff policy and domestic financial policy stimulated market vitality and increased confidence in the market recovery.

In late May, market trading improved, corporate inventory pressure eased, and some companies overhauled and reduced their loads.

At present, as the holiday approaches, downstream and traders mostly predict that it is difficult to fall again, so they prepare stocks in advance to replenish warehouses, and the order increase is obvious, and the market is running strong.

According to the monitoring of the commodity market analysis system of SunSirs, as of May 28, the average price of dichloromethane bulk water in Shandong was 2,245 RMB/ton, up 4.42% from the beginning of the month.

Analysis of influencing factors

Supply side: maintenance support VS loose pattern

Device dynamics: The overall operating rate of the industry remains at around 80%, and the supply is relatively stable. It is reported that Dongying Huatai, Shandong Jinling and other companies are currently operating at reduced loads, and the supply will be alleviated in June, supporting the upward trend of dichloromethane.

Enterprise inventory: As market sentiment recovers, downstream buying sentiment is strengthened, and there is no pressure on enterprise inventory for the time being.

Policy trends: After the Shandong explosion, chemical production safety inspections have become stricter, which may affect the start-up of the device.

Cost side: The prices of raw materials methanol and liquid chlorine are falling

Methanol: The overall start-up remains high and fluctuates, and the number of foreign ships arriving at ports in coastal areas has gradually increased, and port inventories may gradually enter the accumulation channel. Traditional downstream demand continues to be weak. As of May 27, the spot price of methanol in Shandong was 2253.75 RMB/ton, a monthly decline of 7.63%, which weakened the cost support for dichloromethane.

Liquid chlorine: The price of liquid chlorine in Shandong is weak, further weakening the cost support for dichloromethane.

Demand side: Supported by the peak season for refrigerants, export growth offsets weak domestic demand

Peak season for refrigerants: June is the peak season for air-conditioning production, with production schedules increasing by 15% month-on-month, the operating rate of refrigerant enterprises remaining high, R32 prices firm, and the purchase volume of dichloromethane rising steadily.

Export resilience: Export volume increased by 10.8% year-on-year in April, and overseas demand for replenishment continued to be released. The reduction of tariffs between China and the United States is beneficial to the export of chemical products, and demand in Southeast Asia and the Middle East is growing. It is expected that exports in June will continue to grow year-on-year.

Market forecast: Supported by maintenance, dichloromethane prices are expected to run strong in the short term, and attention needs to be paid to the load reduction of the device later.

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