July 30th, News
According to SpotCom: In the second half of July, the dichloromethane market in China as a whole shifted from a "sharp rise" to a narrow and stable but slightly strong trend, with reduced volatility. Manufacturers still have the intention to maintain prices, but transaction follow-up has noticeably slowed down. As of July 30, the mixed price of dichloromethane in bulk in Shandong region was 2,220 CNY/ton, an increase of 4.1% compared to mid-month.
Core Driver Analysis
Cost Side: Support is Phased, Marginal Weaknesses Are Emerging
Geopolitical events drive market sentiment, leading to fluctuations in international oil prices, which put pressure on methanol at high levels. It is difficult for spot prices to continue rising, and port inventory in China has increased after the arrival of imports, cooling the peak season sentiment. Currently, the focus of the methanol market is shifting downward; liquid chlorine has risen strongly, from -150 CNY/ton mid-month to 300-500 CNY/ton, with the cost end only able to support the price bottom of the dichloromethane market, but unable to drive a significant price surge.
Supply Side: High Production, Regional Disparities, Overall Adequate Supply in China
Industry comprehensive operating rates are maintained at a high level of 78%–80%, with no large-scale concentrated maintenance; major facilities in East China are stable, the load in Southwest China has increased, and some facilities in North China are operating at lower loads, with regional price differences existing but overall supply being ample; coupled with low industry inventory, it is difficult for prices to fall significantly, but it is also hard to form a sustained supply gap.
Demand Side: Traditional Off-Season—Only Refrigerant Demand Provides a Floor
The traditional off-season effect will continue. In July, the demand for traditional solvents such as high-temperature coatings, adhesives, and pharmaceutical and pesticide intermediates is weak. Downstream orders are mostly small and essential, with no long-term contracts. R32 refrigerant is the largest stable factor, with peak season stockpiling for air conditioners and export orders providing a baseline demand, preventing a significant price drop, but it is not enough to drive proactive inventory replenishment across the entire industry chain. The export window generally follows overseas demand for refrigerants, and there was no noticeable increase in July.
Future Market Forecast:
On the cost side, the downward shift in methanol prices has weakened support from raw materials. Meanwhile, demand is in the traditional off-season, and downstream sectors such as coatings, pharmaceuticals, and agrochemicals lack the incentive to proactively replenish inventories. Only refrigerants, driven by rigid demand, are providing some floor support; however, there’s a lack of positive catalysts for sustained volume expansion, making it increasingly difficult for prices to surge significantly further. Moreover, with industry operating rates remaining at medium-to-high levels and overall supply volumes staying relatively ample, the supply side struggles to sustain a persistent shortage, leaving manufacturers lacking the necessary transactional momentum to continue raising prices. Liquid chlorine prices remain at high levels, firmly anchoring the cost floor. Overall inventory pressure in the industry isn’t severe, and factories still show willingness to hold prices. Additionally, the stable rigid demand for R32 refrigerant ensures that the price won’t fall sharply, reducing the likelihood of a substantial decline.
It is expected that the short-term market for dichloromethane will likely continue to fluctuate within a narrow range, showing stable-to-strong performance with limited upside potential.
