Holders Lead Selling Activity, Market Focus Shifts Downward (Oct 16–22, 2026)

1. Market Analysis for the Current Period

This period, domestic methylene chloride prices experienced a significant decline, with the market's core logic shifting from cost-driven to fundamentals of supply and demand. Upstream raw materials—methanol and liquid chlorine—saw simultaneous price drops, reducing cost pressures on methane chlorination enterprises and weakening cost support. As industry profitability improved, production facilities increased operating rates, with overall utilization rising to approximately 70%, leading to a loose supply environment. Following the recent price surge to high levels, downstream users and traders exhibited low purchasing enthusiasm. Market activity was limited to small-volume transactions driven by immediate needs, while bearish sentiment prevailed. The main downstream sector, refrigerant R32, maintained an industry-wide operating rate near 40%. Recently, factory production schedules and consumption capacity contracted further, and export volumes declined. With R32 prices consolidating at high levels, channel holders sought opportunities to offload inventory, showing little interest in procuring high-cost supplies. They are awaiting clear pricing signals from major producers before making buying decisions. Other downstream sectors—including coatings, adhesives, pharmaceutical intermediates, and cleaning solvents—lacked momentum to follow suit. The industry remained highly risk-averse, with participants adopting a "buy-as-needed" strategy to avoid inventory risks, resulting in stagnant transaction volumes.

For the next period, methylene chloride prices are expected to continue falling below this week's average. Key focus areas include:

1. Supply: In the upcoming period, methane chlorination units will experience both startups and shutdowns. Production is projected to increase compared to this week, leading to higher producer inventories and continued loose supply conditions.
2. Demand: As methylene chloride prices decline, procurement by downstream users and traders may see some incremental growth.
3. Costs: Raw material prices for methanol and liquid chlorine are likely to remain at low levels, maintaining reduced cost pressures for methane chlorination enterprises compared to previous periods.

Overall, with a loose supply landscape, producers are expected to prioritize sales. Although downstream and trader purchases may increase slightly, large-scale stockpiling is unlikely. Given weak supply-demand fundamentals, the domestic methylene chloride market still faces potential downside pressure, requiring close attention to future news and developments.