SunSirs: Dichloromethane Market Was Weakly Consolidated

Price trend: High supply met weak demand, and the decline continued (August 8-14) 

The supply side was sluggish, while demand was mediocre. The gap between supply and demand continued to widen, putting pressure on on-site inventories and forcing companies to cut prices to reduce inventory. The market was weak and consolidating. According to the SunSirs’ Commodity Market Analysis System, as of August 14, the average price of bulk dichloromethane in Shandong Province was 2,040 RMB/ton, a weekly decrease of 1.69% and a year-on-year plunge of 27.14%.

Analysis of Influencing Factors

Supply Side: Operating Rates Soared, Inventories were Under Pressure

On-site supply was ample, and the overall operating rate of methane chloride units in the industry climbed to around 85%, a six-month high. Downstream procurement was weak, and companies were reducing prices to reduce inventory, which eased inventory pressures for manufacturers.

On the cost side, methanol prices fell, while liquid chlorine prices rose, but cost support was insufficient

Methanol inventories at ports accumulated, and demand was weak, leading to volatile and weak market conditions last week. As of August 14th, the benchmark methanol price on SunSirs was 2,373.33 RMB/ton, down 0.42% year-on-year. Downstream demand for liquid chlorine had improved, leading to a slight price increase, but this had limited support for dichloromethane.

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

From August to September, air-conditioning industry production capacity decreased month-over-month to approximately 12 million units. Pre-sale demand for refrigerants R32 and R410A was temporarily shrinking, leading to cautious purchasing. Summer maintenance and repairs are impacting pharmaceutical and pesticide solvents, leading to a short-term contraction in demand. Adhesives orders were also dragged down by the construction industry, with a year-on-year decline in orders. Overall demand in August is likely to be weaker than in July. With the anticipated peak season of September, companies are increasingly stocking up, providing strong support for the dichloromethane market.

Market outlook

If demand remains stable, prices may bottom out again, testing the 2,000 RMB/ton mark. If supply tightens or exports increase, the market may rebound slightly.

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