September 28th, news:
According to SpotCom: In the second half of September, the Chinese dichloromethane market continued the strong upward trend from the first half of the month, with a significant shift in price levels. The overall operation was characterized by "cost-driven, high-level fluctuation, and a bias towards consolidation." As of September 28, the mixed price of dichloromethane in bulk in Shandong region was 2,897 CNY/ton, an increase of 20.98% from mid-month and 35.08% from the beginning of the month.
Core Driving Factors Analysis
Cost Side: Strong Upside in Both Raw Materials, the Key Driver
Dichloromethane raw material methanol upstream methanol spot prices in September rose by more than 36%, with futures also strengthening. The closure of the strait and tight supply from Iran led to a significant decrease in arrivals, with port inventory reaching a 13-year low. Liquid chlorine prices have been fluctuating at high levels, providing strong cost support for dichloromethane. Against the backdrop of rigidly rising raw material costs, methane chloride companies are under profit pressure or even incurring losses, and manufacturers are determined to maintain prices, making it unlikely that they will offer discounts in the short term.
Supply Side: Production Declines, Spot Market Tightens
Under high cost pressure, the methylene chloride industry in China has seen a continuous decline in operations. Some companies have announced plans for subsequent maintenance and load reductions. Additionally, with no significant inventory pressure before the holiday, the supply of available spot goods is tight, effectively supporting price increases.
Demand Side: Pre-holiday Stockpiling Provides Support, but Peak Season Characteristics Are Not Pronounced
Before the Mid-Autumn and National Day holidays, some downstream users and traders in China conducted stockpiling purchases, providing a moderate level of support for demand. However, the traditional "Golden September" peak season characteristics did not fully materialize: although there was some expectation of stockpiling for the core downstream R32 refrigerant, weak consumption in the terminal air conditioning and cold chain markets limited the potential for increased sales; orders from solvent-based downstream sectors such as coatings, pharmaceuticals, and pesticides were also low, and the export market showed similar weakness. After a period of concentrated restocking in early September, the willingness of traders and downstream buyers to accept high-priced goods significantly declined in the middle and late parts of the month, and the market's ability to absorb high prices gradually weakened.
Technical Analysis
According to the Spotcom AI assistant, the dichloromethane differential combination is (negative, positive, positive), indicating a strong consolidation with a bullish signal. The 5-day differential has declined, while the 10-day and 20-day differentials are rising. The current market trend is generally volatile, with no clear direction for long or short positions. The 60-day and 3-month prices are at high levels, limiting the short-term upside potential; the 1-year cycle is in the mid-to-high range.
3. Future Market Forecast
It is expected that, around the National Day holiday, the dichloromethane market will remain largely stable at elevated levels: on the cost side, methanol and liquid chlorine prices are holding firm, with producers showing strong willingness to support prices, providing solid support at the lower end; however, prices have already climbed to a temporary peak, and downstream demand is growing increasingly reluctant to absorb higher costs, thereby limiting further substantial gains.
Narrow range oscillation to digest price increase: It is expected that the market will mainly experience a narrow range oscillation at high levels, digesting the previous price increase through a method of trading time for space. The overall adjustment space is limited.
Pay attention to holiday logistics and inventory dynamics: During the dual‑holiday period, logistics capacity is expected to slow, and demand may weaken further; with post‑holiday inventory pressures remaining mild, the market is likely to maintain a stable trend at elevated levels.
