Pre-holiday Dichloromethane Price Increase Fails to Continue

February 12th, News

Market Overview: After losing strong support before the holiday, the Chinese market turned from rising to falling.

In February 2026, the dichloromethane market showed a clear "strong in the first ten days, weak in the middle ten days" turning point. In the first ten days, the market continued to rise supported by high costs and reduced supply, with a strong market sentiment; however, starting from the middle of the month (February 10th), the situation changed dramatically. Major manufacturers in Shandong region collectively and significantly reduced factory prices, and the spot market turned from strong to weak, with the confidence in maintaining prices accumulated before the holiday quickly dissolving.

According to the commodity market analysis system, as of February 12, the mixed price of dichloromethane in bulk in Shandong region was 1,785 CNY per ton, down 1.51% from the beginning of the month and down 30.61% year-on-year.

Cost Side: Liquid chlorine prices have fallen from their high levels, and cost support has noticeably weakened.

Liquid chlorine: Before the holiday, the Shandong liquid chlorine market saw its ex-factory prices for tank trucks plummet rapidly—from a high of 300-450 CNY/ton to just 1-100 CNY/ton—due to stable operation of chlor-alkali plants and strong downward pricing pressure from downstream buyers. This sharp drop in liquid chlorine prices has directly eroded the cost-support bottom line of methane chloride enterprises, creating room for these companies to lower their prices and offer greater discounts.

Methanol: Before the holiday, the methanol market showed narrow fluctuations. Although external market benefits provided support for the future, the spot market follow-up was limited. On February 12, the benchmark price of methanol in China was 2,221.67 CNY/ton, a decrease of 1.91% from the beginning of the month.

Supply side: Reduction in production is insufficient to offset inventory accumulation, making inventory clearance the top priority.

Some key production units in Shandong continue to operate at reduced capacity, resulting in an industry utilization rate of around 75%. However, the extent of the capacity reduction is insufficient to offset the shrinking demand, causing corporate inventories to rise generally to medium-to-high levels, with some companies facing significant inventory pressure. Production enterprises have shifted their mindset from “holding prices and waiting for price increases” to “lowering prices to maintain volume,” making proactive inventory clearance their top priority. The willingness to sell has become very strong, with many producers actively cutting prices and launching promotional offers, leading to price declines exceeding 8%.

Demand Side: Inventory stocking ended earlier than in previous years, and new orders are severely lacking.

As the Spring Festival approaches, downstream enterprises and traders in China have largely completed their pre-holiday stockpiling. Most end-users have entered a shutdown state, with only a few large factories maintaining rigid demand procurement. The lack of new orders and weaker-than-expected demand have become the fundamental reasons for the reversal of this round of market conditions.

Outlook for the Future:

After the Spring Festival, the market trend is weak and fluctuating, with a continued downward momentum. The hidden inventory accumulated before the holiday will take time to be digested, and downstream purchasing intentions are unlikely to recover in the short term. If the liquid chlorine prices do not collapse, the cost side will limit the space for further deep declines, but there is a lack of drivers for a rebound. Whether the market can stabilize in March entirely depends on whether companies are willing to implement "substantial production cuts" to counteract "lackluster demand." Attention should also be paid to changes in costs.