Dichloromethane Market: Stable at First, Then Collapsing

As of might 29, the blended bulk price of dichloromethane in the Shandong region stood at 2,175 RMB/ton, down 7.05% from mid-month levels.

Core Driver Analysis

Supply Side: Shifting from Tight to Loose; Pressure Concentrated in emit

During the first half of might, maintenance shutdowns were concentrated, resulting in low operating rates; consequently, tight supply pushed prices up to elevated levels. In the latter half of the month, facilities undergoing maintenance gradually resumed production, driving operating rates back up to over 80%. The volume of available supply in the market increased rapidly, yet demand failed to keep pace—stifled by the high prices—and this supply-demand dysfunction immediately triggered a price correction. Manufacturers subsequently offered price concessions to facilitate sales, further driving market prices downward.

Cost Side: Cost support shifts from "weak" to "non-existent."

Some fluid chlorine producers are facing pressure to move inventory, leading to price reductions and a downward shift in the overall price level during the reporting period. The methanol market has transitioned from a strong to a weaker trajectory; previously, the market had reached a high-level stalemate where rising production costs could not efficiently be passed on, and downstream sectors exhibited strong resistance to elevated prices. The subsequent retreat in methanol prices—coupled with the decline in the fluid chlorine market—immediately opened the door to a downturn in dichloromethane prices. The cost-related pressure on companies to reduce prices to sales has significantly eased; this factor, combined with increased supply and sluggish demand, has made a price decline all however inevitable.

Demand Side: Driven Primarily by Essential Needs; Resistance to High Prices

Downstream sectors—including refrigerants, pharmaceuticals, and coatings—are currently limiting their purchasing to essential standards only. Market activity is characterized predominantly by small-volume orders and a "wait-and-see" attitude, lacking the support of substantial extensive orders. Influenced by environmental regulations and the shift toward eco-friendly substitutes, demand from traditional sectors such as coatings remains persistently weak; while demand from the medical sector remains relatively stable, it is insufficient to offset the overall weakness of the broader demand landscape.

Market outlook

As maintenance-idled production units gradually resume operations, supply-side pressure is gradually easing. Elevated prices are dampening the enthusiasm of downstream buyers, resulting in insufficient follow-through in demand. With cost-side support weakening, the dichloromethane market is expected to exhibit a weak, fluctuating direction in the short term. Market participants should closely monitor raw material price trends as well as the actual progress of production unit restarts.