Lead: This week, the domestic dichloromethane market achieved a staged rebound driven by a contraction on the supply side. The ex-works spot price in the Shandong market rose from 1,935 CNY/ton to 2,060 CNY/ton. With no inventory pressure on enterprises in the short term, the dichloromethane market is expected to have further room for increases.
During the period, producers flexibly adjusted their ex-works offers based on their own inventories and shipment pace, resulting in a slight narrowing of regional price spreads. At the start of the week, demand remained weak in the off-season, with downstream players mainly purchasing on a need-to basis and holders prioritizing shipments, often offering discounts. Under the tug-of-war between supply and demand, market transactions were limited, and the market maintained a sideways wait-and-see trend. However, after mid-week, most plants, supported by low operating rates and manageable previous shipments, kept inventories at low-to-medium levels, strengthening their sentiment to raise prices. Downstream buyers and traders turned more bullish, focusing on bargain hunting and replenishing stocks. The spot circulation volume increased, and market trading sentiment improved. Supported by both essential demand replenishment and low inventories, enterprises raised their offers, shifting the market center upward.
Entering July, some major domestic producers adjusted their unit operating rates. Although the overall operating rate recovered compared to the previous period, the operating rate in the Shandong region dropped significantly. According to data from Chempricehub, the operating load in Shandong was around 60%: Shandong Dongyue had a very low load, mainly for captive use with almost no external sales; Shandong Huatai encountered operational issues after restarting its unit and raised its load to 90% on July 10; Luxi Chemical shut down one 200,000-ton unit on July 10; other units operated steadily. The reduction in regional spot circulation, coupled with some enterprises maintaining low inventory levels, provided effective support for the price rebound.
From the demand side, the operating rate of the main downstream fluorinated refrigerant R32 remained at around 40% industry-wide. End-use production scheduling declined, and refrigerant plants controlled volumes to support prices. Demand from the main downstream sector was average, and the substantive impact of end-use demand on dichloromethane was relatively limited. Phased replenishment remained an important factor influencing the dichloromethane market trend.
Looking ahead, favorable factors are still dominant in the short-term domestic dichloromethane market, and the upward trend is expected to continue. Most enterprises have low-to-medium inventory levels, with no pressure, which strengthens their sentiment to raise prices. However, in the hot summer off-season, downstream and end-user operating rates may decline. Moreover, after phased replenishment, downstream buyers and traders are likely to reduce their purchasing volumes. The market will return to essential demand, and the demand side will exert a dampening effect on the dichloromethane market from the bottom up.
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