Lead-in: Amid geopolitical disruptions, the domestic dichloromethane (DCM) market strengthened again in late October, with prices holding steady into early November. This was primarily driven by manageable pressure on some DCM producers and rising feedstock costs influenced by geopolitical factors. However, as prices reached high levels, market sentiment returned to rationality, leading to a stalemate and consolidation phase. By November 6, the DCM price in Shandong stood at 3,250 yuan/ton, an increase of 230 yuan/ton from the previous period, representing a 7.62% rise.
The core logic of this market cycle shifted from cost-driven to supply-demand fundamentals-driven. At the end of the month, the domestic DCM market was boosted by cost-side support, combined with low inventory pressure for some enterprises, leading to strong performance. However, as the trend continued upward and prices climbed into the high range, downstream end-users and intermediate traders showed weak acceptance of expensive goods. Procurement remained cautious and wait-and-see, following demand needs only. Consequently, overall trading activity visibly cooled. Against this backdrop, inventory holders' selling rhythms diverged; some enterprises flexibly adjusted their pricing strategies based on order status and remaining inventory. The center of gravity for transactions loosened, mainstream DCM prices fluctuated slightly within a narrow range, bull-bear contention intensified, and the market entered a stalemate consolidation stage.
Feedstock methanol saw minor adjustments, while liquid chlorine prices fell from highs, slightly reducing cost pressure on chloromethanes. Nevertheless, with DCM prices running high, industry profits for chloromethanes recovered significantly. According to Chempricehub data calculations, during this period, the weekly average cost of chloromethanes was 2,678 yuan/ton, a decrease of 20 yuan/ton from the previous period (-0.74%). The weekly average profit was 222 yuan/ton, an increase of 150 yuan/ton from the previous period (+208.33%). Following the profit recovery in the chloromethane industry, apart from units undergoing normal maintenance, multiple units resumed stable operations.
In the first half of the week, most units operated stably. In the second half, Jiangxi Liwen reduced load to 75%, Luxi's 200,000-ton unit reduced load, Fuqiang's 300,000-ton unit shut down, and Dawang's unit restarted but had not yet produced output. Since shutdowns and load reductions began in the second half of the week, overall production and capacity utilization rates rose slightly compared to the previous period. Looking ahead to the next period, although the Jinling Dawang unit is expected to restore stable operation, other units that shut down or reduced loads will continue doing so throughout this period. Therefore, overall production and capacity utilization are projected to decline.
On the demand side, the general weakness persisted, with insufficient stimulus from essential demand across the entire downstream chain. Currently, mainstream downstream applications for DCM show clear divergence. Small and medium-sized downstream enterprises in solvents and cleaning agents maintain only routine essential replenishment, with purchasing strictly according to need becoming the dominant practice. The operating rate of fluorocarbon refrigerant R32 remained stable at 48% (flat vs. previous period). At present, maintaining balanced limited demand space is preferred over accumulating high inventories. Refrigerant producers continue to adopt a strategy of controlling volume to maintain prices, further suppressing DCM procurement demand. Other downstream sectors, including coatings, adhesives, pharmaceutical intermediates, and cleaning solvents, lack follow-through momentum. The industry exhibits a strong fear of falling prices, generally adopting a "buy-as-needed" approach to avoid inventory risks, making it difficult to see significant transaction volumes.
In summary, although there are expectations of shutdowns for chloromethane production units in the subsequent period, constrained by poor demand, enterprise inventories may slightly increase. Market wait-and-see sentiment has intensified. Under bull-bear contention, the domestic DCM market is expected to remain in high-level consolidation, with attention focused on future news developments.
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