Methylene Chloride Market Hits Bottom and Stabilizes, with Supply Contraction Driving a Moderate Recovery

September 17, News

Price Trends:(9.9–9.17)

The supply of dichloromethane in Shandong, China, is loose while demand is weak. The market transactions are cautious, with a prevailing wait-and-see attitude. Companies continue to offer discounts to reduce inventory, and the market trend remains downward. According to the commodity market analysis system, as of September 17, the average price of dichloromethane in bulk in the Shandong region was 1,845 CNY/ton, a decrease of 4.9% within the period, and a sharp decline of 33.63% year-on-year, reaching a nine-year low. Currently, the operating rate on the supply side has been adjusted downward, and companies are reducing loads to stabilize prices. Exports continue to increase, alleviating the supply pressure, and prices have stabilized at the bottom.

Analysis of Influencing Factors

Supply Side: Supply Contraction, Reducing Load to Stabilize Prices

The facility utilization rate for the chloromethane industry has been reduced from a high of 85%. The Dongying Huatai facility is now operating at 50% capacity. Companies are facing high inventory pressure and have been continuously selling at reduced margins. Currently, they are alleviating supply pressure by reducing operating loads and showing a stronger desire to stabilize prices.

Cost Side: Stable with Minor Adjustments, cost support, overall stable.

In terms of methanol raw materials, the market is supported by the peak season "Golden September and Silver October," leading to a slight price increase. As of September 17, the benchmark methanol price stood at 2,286.67 CNY per ton, up 0.66% over the period. However, supply from domestic plants continues to rise, while import arrivals remain at historically high levels. Meanwhile, downstream plant maintenance has weakened demand, causing overall inventories to keep climbing—indeed, port inventories have already hit record highs, further limiting upward momentum. Meanwhile, liquid chlorine shipments remain sluggish, prompting a minor price drop in Shandong region, though cost support overall remains stable yet slightly weak.

Demand Side: Weak Domestic Demand, Strong Foreign Demand

On the domestic demand side: The downstream refrigerant industry, a key sector, remains constrained by quotas, resulting in rigid demand but no significant growth. Meanwhile, sectors like pharmaceuticals and chemical synthesis are experiencing a moderate recovery. However, industries such as adhesives and coatings continue to be largely driven by small, essential purchases, as they remain weighed down by the sluggish real estate market.

On the export front: Performance remains robust, with significant increases in exports to Southeast Asia, the Middle East, and other regions. In September, export inquiries and shipping schedules continued to be active, effectively easing supply pressures in China.

Outlook: In the short term, there may be a slight recovery, but the rebound will be limited.

As companies reduce maintenance-related production cuts and exports remain strong, the market’s supply-and-demand dynamics are improving marginally, creating modest room for prices to inch upward. However, given the limited strength of domestic demand and weak cost-side support, there isn’t much momentum for a significant price rally. As a result, the market is expected to continue its volatile yet generally stronger trend.