Liquid chlorine costs rise on higher crude oil, squeezing DCM profitability

1. Today's Summary

2. Oct 30: International crude oil prices rose as the market focused on the potential escalation of US-Iran tensions and supply risks intensified by Houthi attacks on Saudi Arabia. NYMEX WTI December futures closed at $104.12/bbl, up $2.12 (+2.08%); ICE Brent December futures closed at $117.64/bbl, up $2.76 (+2.40%). China INE crude oil futures (contract SC2612) fell by 8.3 to 727.6 CNY/bbl during the day session but rebounded by 30.9 to 758.5 CNY/bbl in the night session.

3. Nov 2: Domestic liquid chlorine prices were raised to 500 CNY/ton today.

4. Spot Market Overview

Table 1: Summary of Domestic Dichloromethane Prices (Unit: CNY/ton)

Based on the Shandong region, dichloromethane (DCM) prices closed at 3250 CNY/ton today (range: 3200-3300 CNY/ton), remaining stable compared to the previous trading day. The domestic DCM market is currently consolidating. Inventory pressure among some producers is not significant, so offers remain largely stable. However, with DCM prices at relatively high levels, downstream buyers and traders show limited willingness to take orders or follow up, leading to a cautious wait-and-see attitude in the market.

3. Production Dynamics

The capacity utilization rate for methane chlorides stands at 71.07%. Gansu Juhua has started production, and its output is included in the capacity and production statistics. Regarding cost and profit, upstream raw material liquid chlorine prices rose today while methanol prices remained stable, pushing up the theoretical cost of methane chlorides. Based on externally purchased liquid chlorine, the daily profit margin for methane chlorides is estimated at 98 CNY/ton.

4. Price Forecast

Current DCM prices are at relatively high levels, with insufficient motivation from downstream users and traders to place orders or follow up, resulting in sluggish trading activity and strong wait-and-see sentiment. However, inventory pressure remains manageable for some methane chloride producers, and there are plans for shutdowns among other enterprises in the near future. Amidst these conflicting factors, the domestic DCM market is expected to trend slightly weaker while remaining generally stable. Attention should be paid to changes in market news and fundamentals.

5. Related Products Update

Refrigerant Market: Using the East China bulk shipment market as a benchmark, major fluororefrigerant R32 factories maintain firm offers, controlling volumes to support prices. As of press time, mainstream large-scale factories in East China quoted around 65,500 CNY/ton (aligned quotes for domestic and export trade); mainstream market offers in East China ranged from 63,500 to 64,500 CNY/ton, consistent with morning expectations. Market intelligence indicates that inquiries for bulk shipments through channel markets have been passively low over the long term. Bulk supplies are fixed for key OEM clients, while small-packaging sales velocity is slow. Consequently, source factories are strictly controlling spot volume increases. Statistics show that the overall industry operating load for fluororefrigerant R32 remains near 40%. Recently, factory production schedules and consumption forces have contracted further. Export volumes have rebounded, driving active destocking. With R32 prices holding sideways at high levels, channel holders are seeking opportunities to sell off inventory, showing little interest in purchasing high-cost stock, and are waiting for clear pricing signals from mainstream large factories. Chempricehub predicts that short-term R32 trends will focus on volume control to support prices, with contract negotiations ongoing; monitor equipment dynamics and production scheduling rhythms within the industry.

6. Data Calendar

Table 2: Domestic Methane Chloride Data Overview (Unit: 10,000 tons)