Market Overview

In April, the dichloromethane market in Shandong showed a unilateral downward trend, with a light trading atmosphere. Due to the continued weakness in demand, production enterprises had a strong willingness to ship, and bidding sales became the mainstream strategy. Coupled with the downward trend in raw material prices and insufficient cost support, the focus of the dichloromethane market continued to decline. On April 27th, the price fell to 2060 yuan/ton, with a monthly decline of 15.05%, the lowest in nearly five years. Low prices and the approaching May Day holiday have led to a slight rebound in prices as some downstream companies replenish their inventory at low prices, but the overall market is still in a weak pattern.
According to the monitoring of the commodity market analysis system of Shengyi Society, as of April 30th, the average price of dichloromethane dispersed water in Shandong Province was 2150 yuan/ton, with a monthly decline of 11.34%.
analysis of influencing factors
Supply side: Partial maintenance and load reduction, with relatively loose supply
Device dynamics: Some methane chloride units in Shandong region have gradually recovered after maintenance, with a slight increase in market supply in the middle of the month. Coupled with the annual maintenance and load reduction of units in other regions, the overall supply of the industry is relatively stable, and the operating rate fluctuates around 75%.
Enterprise inventory: Affected by sluggish demand, the enterprise still focuses on destocking, and manufacturers continue to offer small discounts on shipments. Pre holiday stocking and shipments are still acceptable.
Cost side: The prices of raw materials methanol and liquid chlorine are decreasing
Methanol: Due to the bearish macro sentiment and weak downstream demand, the high inventory of methanol at ports has dragged down prices. As of April 29th, the spot price of methanol in Shandong was reported at 2437.50 yuan/ton, a monthly decrease of 5.52%, which weakened the cost support for dichloromethane.
Liquid chlorine: The price of liquid chlorine in Shandong has fluctuated slightly and is running weakly, further weakening the cost support of dichloromethane.
On the demand side: there is a strong need for support, but a lack of explosive power
Affected by weak procurement in industries such as refrigerants, pharmaceuticals, and pesticides, market transactions have been sluggish. It is expected that downstream demand purchases will be made in May, with a slight improvement compared to the previous month, but still weak compared to the same period last year.
Refrigerant industry: favorable policies but limited transmission. The price of R32 has skyrocketed by 65% year-on-year to 48500 yuan/ton. The “trade in” policy for household appliances has significantly driven the growth of air conditioning production (+13% year-on-year in May), supporting the demand for R32. However, due to quota restrictions, refrigerant companies prioritize digesting inventory and have limited incremental purchases of dichloromethane.
The pharmaceutical industry: stable demand and no unexpected growth. In April, due to the clearance of inventory after GMP certification, demand decreased by 10% -12% month on month. It is expected to remain stable in May, with some companies restocking small orders, but there is no centralized stocking market.
Pesticide industry: Seasonal rebound, but dragged down by exports. May is the peak season for medication in the northern hemisphere, with a slight increase in stocking demand from domestic pharmaceutical companies. However, overseas pesticide inventories remain high, and China’s export growth rate has slowed down, suppressing the enthusiasm for pesticide intermediate production.
Other fields, such as adhesives, have not seen a significant rebound in industrial demand due to fluctuations in manufacturing PMI.
Market forecast: low-level oscillation operation, pay attention to changes in the supply and demand margin
It is expected that the demand for replenishment after the holiday will be released, and the price center of dichloromethane will slightly shift upward in May. Attention should be paid to the sustainability of post holiday stock replenishment, equipment maintenance status, and raw material price trends.