Recent Low-Range Fluctuations in Dichloromethane

December 9th News

Market Overview: (12.1-12.9)

According to the commodity market analysis system, as of November 9, the average price of dichloromethane in bulk in Shandong region was 1685 CNY/ton, unchanged from the beginning of the month, but a significant decrease of 45.56% compared to the same period last year. This highlights that the market is at a historical low in terms of price, with overall severe pressure.

In the first week of December, the market as a whole was in a state of consolidation and observation. By the weekend, companies were bidding to sell, and downstream buyers were moderately restocking. Recently, there have been some facilities in the region reducing their load or indicating an intention to do so, which has strengthened the desire of companies to stabilize prices. Currently, the factory price in Shandong has risen to 1640-1670 CNY/ton, showing a slight upward adjustment trend.

Supply Side: Despite High Load, Local Load Reductions Provide Support

Industry operating rates remain at a high level of around 85%, and overall supply is ample. However, recently some facilities in Shandong have reduced their output or are planning to do so, and coupled with varying inventory pressures among enterprises, supply pressure has eased slightly, boosting companies' willingness to stabilize prices.

Demand Side: Persistent Weakness Presses Down on Price Upside Potential

Despite low prices, the willingness of downstream buyers and traders to purchase remains weak, with most buying on a need basis, making it difficult to form a sustained upward momentum. Market transactions are mainly driven by rigid demand, and there are no significant signs of improvement in the demand side.

Cost Side: Raw material trends diverge, with liquid chlorine providing significant support.

Liquid chlorine: Downstream demand remains stable, and prices in the Shandong region stay at high levels, serving as a key cost support.

Methanol: The pace of market restocking has slowed down, with expectations of increased imports, leading to a weak and fluctuating price trend, which partially alleviated the cost pressure. As of December 9th, the benchmark price for methanol in China was 2090 CNY/ton, falling by 1.42% within the period.

Outlook: In the short term, the market in China is expected to remain stable with minor adjustments, and the room for both upward and downward movements is limited.

Supporting factors: High liquid chlorine costs, local supply adjustments due to reduced production by companies, and a clear intention by Chinese companies to stabilize prices.

Constraint: The overall industry load remains relatively high, and the weak terminal demand trend persists, which will limit the extent of any price rebound.