[Introduction] During this cycle, the domestic dichloromethane market exhibited a pattern of stabilizing after a rise with regional divergence. After an initial uptrend, the overall market entered a consolidation phase. Prices in Shandong edged down slightly, while quotations in other major regions remained stagnant. The market was characterized by long-short gaming, with transactions mainly consisting of small orders for essential needs and lacking concentrated volume support.

1. Regional Prices Fell After Rising, with Distinct Divergence

At the start of the week, the domestic dichloromethane market continued its post-holiday upward trend. Taking Shandong as an example, the average market price on May 11 reached 2,310 yuan/ton, up 14.93% from before the holiday. However, as the upward momentum gradually faded, prices in some regions reversed downward after the increase. As of May 14, the mainstream quotation for bulk orders in Shandong was 2,290-2,320 yuan/ton, reflecting a slight decline during the week. Quotations in Jiangsu and Zhejiang remained stable at 2,340-2,600 yuan/ton, while the delivered price in Guangdong was around 2,600-2,700 yuan/ton.

2. Controllable Enterprise Inventory, Dominant Price Stabilization Intent

From the supply side, domestic chloromethanes supply decreased compared with last week. This period's chloromethanes production stood at 62,300 tons, down 9.05% from the previous period; capacity utilization was 73.72%, down 7.28 percentage points. During the period, the 200,000-ton plant of Hengyang Jindong was shut down, with the overall volume loss exceeding volumes restored, leading to a decline in production and capacity utilization compared to last week. After earlier destocking, enterprise inventory pressure was generally low, with most manufacturers maintaining medium-to-low inventory levels. Under limited operating rates, there was no obvious risk of inventory build-up, providing support for market prices.

Against this backdrop, enterprises generally aimed to stabilize prices, with a strong willingness to support prices. Each producer flexibly adjusted their offers based on their own shipment pace and spot inventory, operating with the market trend and deliberately avoiding significant price fluctuations. Companies with low inventory and smooth shipments maintained firm quotations with limited room for concessions. Meanwhile, some companies with slightly accumulated inventory and an urgent need to move goods offered small discounts to facilitate transactions. However, the overall price reduction was controllable, without forming a vicious competition scenario. Simultaneously, upstream raw material prices for methanol and liquid chlorine remained high and stable, providing solid cost support which further limited enterprises' room for price cuts.

3. Tepid Essential Demand, Lackluster Follow-Up Momentum

On the demand side, essential needs remained stable but lacked growth, making it difficult to provide sustained upward support for prices. This week, the overall operating rates of major downstream industries were stable. The operating rate of fluorinated refrigerant R32 plants remained flat compared to the previous period, mainly due to a decline in production scheduling in the household air conditioning market, with the supply side primarily controlling volumes to support prices. Other downstream sectors maintained cautious procurement, mostly placing small orders for essential needs, with limited large-volume transactions.

On the export side, although there were sporadic orders providing some support, the overall volume was limited and did not provide strong market impetus. Overall, downstream demand lacked highlights and follow-up momentum was insufficient to absorb the cost pressures from the earlier price hikes, becoming the core factor constraining price increases.

4. Fundamental Long-Short Gaming, Limited Room for Subsequent Adjustments

Key points to watch: 1. Supply side: Production shows expectations of an increase. Although enterprises may see inventory accumulation, overall inventory pressure is not significant. 2. Demand side: Purchasing power from downstream customers and traders is limited. Transaction intensity in the next period is expected to be similar to this week. 3. Raw materials: Methanol remains at high levels with volatility, liquid chlorine prices maintain a medium level, and cost pressure for chloromethanes remains unabated. 4. Exports: Domestic quotations are relatively high, weakening price competitiveness. Coupled with slowing overseas essential demand and restricted trade circulation in some regions, recent export orders have declined year-on-year, reducing the digestion of domestic supply. In summary, with no significant inventory pressure, enterprises intend to maintain stable prices. However, downstream demand performance is poor, lacking support. Under long-short gaming, the domestic dichloromethane market is expected to operate primarily with a steady but weak bias. Attention should be paid to changes in market news.