High Costs and Supply Contraction Keep Dichloromethane Prices Relatively Strong

February 6 news

Market Overview:

In 2026, the Chinese dichloromethane market ended its weak performance, and with strong cost support and reduced supply, prices rebounded from a low point, showing a regional upward trend.

Entering the first week of February, the upward trend continued. According to the commodity market analysis system, as of February 6, the average price of dichloromethane in bulk in Shandong region was reported at 1860 CNY/ton, an increase of 2.34% from the beginning of the month and 9.57% from the beginning of the year.

Core Drivers of Price Increases

1. Strong cost support: High liquid chlorine prices have pushed production into losses.

In February, the liquid chlorine market experienced a slight decline before rebounding to January’s high levels. Currently, ex-factory quotes for tank trucks remain at 300–450 CNY per ton. Methanol prices have edged down slightly; as of February 6, the benchmark price for methanol stood at 2,200 CNY per ton, a decrease of 2.87% from the beginning of the month. While cost pressures have eased somewhat, the overall situation of losses has yet to change. Faced with persistent cost pressures, companies are strongly inclined to raise prices.

2. Supply reduction: Plant load reductions alleviate excess pressure

To address the losses, some production units in Shandong region have proactively reduced their load and are operating at low levels. At the beginning of February, the units continued to operate with reduced loads, with some scheduled shipments, limiting the circulation of spot goods. Inventory is at a low level, and the supply elasticity has contracted. The pressure on the supply side has been temporarily alleviated, providing room for price increases.

3. Demand side: Pre-holiday essential stocking provides basic support in China.

As the Spring Festival approaches, downstream industries in China are conducting routine pre-holiday stockpiling, creating a rigid demand. However, the momentum for demand growth remains limited. The overall purchasing by downstream sectors is mainly driven by necessity, without significant speculative buying. Therefore, the demand side provides support rather than a strong pull.

Outlook: Strong in the short term, but still under pressure in the long term

Overall, the market is expected to maintain a relatively strong consolidation trend before the Spring Festival. The support from high costs and reduced supply remains, and production enterprises have a clear intention to hold prices firm, making it easier for prices to rise than to fall. However, the extent of demand follow-up will be the key to determining the upward space. It is necessary to closely monitor the trend of liquid chlorine prices and the operational changes of major production facilities in China.