Supply-Demand Game, Dichloromethane Under Pressure and Declining

August 7th news

Price Trend: (8.1-8.7)

First rise then fall: At the beginning of the week, prices continued to briefly increase as seen at the end of July, but downstream acceptance was low. Subsequently, supply pressure increased, prompting companies to lower prices to boost sales.

Price decrease is obvious: According to monitoring by the commodity market analysis system, as of August 7, the average price of methylene chloride in bulk in Shandong region was 2075 CNY/ton, with a weekly price decrease of 5.36% and a year-on-year decrease of 22.28%.

Analysis of Influencing Factors

Supply side: Operating rates have rebounded, and inventory pressure has become apparent.

Device dynamics: Enterprises such as Dongying Huatai and Jinling Chemical have resumed operations, leading to an overall industry operating rate rising to around 80%, resulting in ample supply.

Inventory pressure: downstream procurement is weak, enterprises are reducing prices to reduce inventory, and inventory pressure has eased slightly for some manufacturers.

Cost Side: Methanol falls, liquid chlorine rises, cost support insufficient.

Methanol: Port inventory in China is high, and the market trend within the week was volatile and weak. As of August 7th, the benchmark price of methanol was 2383.33 CNY/ton, with a price decrease of 0.42% within the week.

Liquid chlorine: Supply in Shandong tightens, downstream buyers increase purchases, and prices rise slightly, but the impact on dichloromethane is limited.

Demand side: Seasonal suppression, with rigid demand procurement as the main approach.

Downstream industries such as refrigerants and pharmaceuticals are showing moderate purchasing enthusiasm, mainly focusing on replenishing stocks as needed, without any noticeable increase in volume. In some regions, factors such as high temperatures and power restrictions have led to a slight decline in operating rates, suppressing the release of demand.

Future Market Outlook

Supply is relatively ample, and prices are expected to fluctuate at low levels. If downstream demand recovers or exports increase, the market may rebound slightly. Key factors to watch include changes in production facilities, inventory fluctuations, and export order situations.