Market Overview

In early May, the dichloromethane market in Shandong was under pressure and fell. Accumulated inventory in enterprises, urgent demand for purchasing on the demand side, sluggish market trading, manufacturers continuing to offer discounts on shipments, and dichloromethane reaching a five-year low again. On May 13th, the average price of dichloromethane dispersed water in Shandong region was 2035 yuan/ton. Subsequently, the tariff policies of China and the United States, as well as domestic financial policies, stimulated market vitality and boosted confidence in market recovery. In late May, market trading improved slightly, and inventory pressure on enterprises weakened. In addition, some enterprises underwent maintenance and reduced their burdens. As the holiday approached, downstream and trading companies predicted that it would be difficult to fall again, so they prepared in advance to replenish their inventory, resulting in a significant increase in orders and a strong market trend.
According to the monitoring of the commodity market analysis system of Shengyi Society, as of May 28th, the average price of dichloromethane dispersed water in Shandong Province was 2245 yuan/ton, an increase of 4.42% from the beginning of the month.
analysis of influencing factors
Supply side: Maintenance support vs. relaxed pattern
Device dynamics: The overall operating rate of the industry remains at around 80%, and the supply is relatively stable. It is reported that the supply will ease in June, supporting the upward trend of dichloromethane.
Enterprise inventory: With the recovery of market sentiment and the strengthening of downstream buying sentiment, there is currently no pressure on enterprise inventory.
Policy Trend: After the Shandong explosion, chemical safety production inspections have become stricter, which may affect the operation of facilities.
Cost side: The prices of raw materials methanol and liquid chlorine are decreasing
Methanol: Overall production remains at a high level of fluctuation, with an increasing number of foreign ships arriving at ports in coastal areas, and port inventory may gradually enter the accumulation channel. Traditional downstream demand continues to be weak. As of May 27th, the spot price of methanol in Shandong was reported at 2253.75 yuan/ton, a monthly decrease of 7.63%, which weakened the cost support for dichloromethane.
Liquid chlorine: The weak operation of liquid chlorine prices in Shandong further weakens the cost support of dichloromethane.
Demand side: Supported by refrigerant peak season, export increment offsets weak domestic demand
Refrigerant peak season: June is the peak season for air conditioning production, with a 15% month on month increase in production scheduling. Refrigerant companies maintain high operating rates, R32 prices remain firm, and the purchase volume of dichloromethane is steadily increasing.
Export resilience: The export volume in April increased by 10.8% year-on-year, and the demand for overseas replenishment continued to be released. The reduction of tariffs between China and the United States has benefited the export of chemical products, and the demand in Southeast Asia and the Middle East has increased. It is expected that exports will continue to grow year-on-year in June.
Market forecast: Maintenance support, it is expected that the price of dichloromethane will be strong in the short term, and attention should be paid to the reduction of equipment load in the future.