Introduction: This week, the dichloromethane market first surged sharply and then fluctuated lower, showing a phased pattern. After earlier low-price destocking, inventory levels at most enterprises fell to medium-low positions. Coincidentally, an enterprise in the Shandong region experienced an equipment failure and halted production last Saturday, with the expected shutdown period being relatively long. Supported by this news, market sentiment leaned strongly toward hoarding and awaiting price increases, driving a broad price surge. However, after prices advanced to high levels, downstream buyers and traders lacked the momentum to follow up, demand-side performance weakened, and holders once again shifted to a shipment-oriented mindset. During this cycle, the average dichloromethane price in the Shandong region rose by 423 yuan/ton to 2,305 yuan/ton, an increase of 22.48%.
The main factor driving market fluctuations this week was the sudden equipment failure and production halt on the supply side, which, combined with the medium-low inventory levels resulting from earlier price cuts and destocking, pushed market prices up rapidly. Last Saturday, an equipment failure in the Shandong region caused a production halt, with the expected maintenance shutdown period being relatively long, thereby contracting effective supply in the region. Spurred by this news, production enterprises and traders grew increasingly reluctant to sell and generally held back supply in anticipation of higher prices, launching the dichloromethane market into a broad upward trend. Led by Shandong, East China and South China also raised quotations substantially, narrowing the price gap between Shandong and East China.
During the cycle, although the Yonghao Hetai, Huichang Yonghe, and Henan Jinhai plants resumed operation after restart, the 200,000-ton Jinling Dongying plant was shut down due to equipment failure. Since the output loss outweighed the restored capacity, output and capacity utilization trended downward. Methane chloride output in this period totaled 66,100 tons, down 3.78% from the previous week; capacity utilization was 73.82%, down 2.92 percentage points from the prior period. Looking ahead to the next cycle, as operating rates at the Henan Jinhai and Huichang Yonghe plants gradually ramp up, domestic methane chloride output and capacity utilization are expected to recover.
Domestic Methane Chloride Supply–Demand Balance (Unit: 10,000 tons)
| Data Category | Item | Current Period | Previous Period | Change | Next Period Trend |
|---|---|---|---|---|---|
| Supply | Dichloromethane output | 3.97 | 4.12 | -0.15 | ↗ |
| Chloroform output | 2.64 | 2.75 | -0.11 | ↗ | |
| Total supply | 6.61 | 6.87 | -0.26 | ↗ |
Data source: Chempricehub
However, after prices peaked, upward momentum waned. Downstream buyers and traders reduced purchasing intentions, mostly adopting a cautious wait-and-see stance. Overall trading sentiment cooled, and terminal demand remained weak, constraining the dichloromethane market from the bottom up. Against the backdrop of insufficient demand, market sentiment shifted quickly. Some holders began to prioritize shipments and competed on price. The operating rate of the primary downstream consumer, refrigerant R32, fell to around 40% across the industry, reflecting generally mediocre operating conditions. Owing to seasonal effects, industry demand softened, and producers slowed their production pace to control spot supply volumes. During the export "window period" in the foreign trade market, the supply side actively pushed export volumes to secure quota completion rates. At present, matching the limited demand space is a far better option than accumulating inventory at high prices.
Table: Fluorinated Refrigerant R32 Capacity Utilization Comparison
| Product | Current Period | Previous Period | Change | Next Period Direction |
|---|---|---|---|---|
| Refrigerant R32 | 42% | 53% | -11.00 percentage points | ↗ |
Data source: Chempricehub
Overall, in the next cycle, some restarted plants will resume stable operation, and output will increase from this cycle's level. Enterprise inventories may accumulate as shipments remain sluggish, with performance varying by enterprise. In addition, after earlier bargain hunting and constrained by high dichloromethane prices, downstream buyers and traders are expected to show lukewarm interest in taking delivery in the next cycle, weakening demand-side support. Going forward, holders will remain shipment-oriented. The dichloromethane market is expected to soften and decline. Enterprises will flexibly adjust quotations based on their shipment and inventory conditions, and market participants should monitor subsequent news developments.
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