Introduction: In the first half of 2026, the domestic chloroform market in China exhibited a trend of strong gains followed by high-level fluctuations overall. Taking the spot price in Shandong as an example, the average price for the first half of the year was 2,494 yuan/ton, up 34% month-on-month from the second half of 2025. Multiple factors, including supply-demand dynamics, costs, and macroeconomic conditions, created a balanced constraint in the chloroform market.

I. Multiple positive factors underpin the market; chloroform prices strengthened in H1

In the first half of 2026, China's chloroform market experienced a volatile trend. During January-February, domestic chloroform prices fell and then remained at low levels. The overall capacity utilization rate of the chloromethane industry remained high. With a loose supply side, enterprises faced inventory pressure. However, the operating rate of refrigerant R22 remained around 50%, and small-quota enterprises operated at basically low loads, resulting in insufficient demand support for chloroform. In March, the market began to surge. Affected by the ongoing Middle East geopolitical conflicts, international energy market volatility intensified, and the price of feedstock methanol rose significantly. The cost side provided strong support for chloroform, prompting producers to push up offers, and the market focus shifted upward. Downstream purchasing sentiment improved as the market warmed, and procurement attitudes strengthened. Restocking for rigid demand and moderate stockpiling occurred simultaneously, improving transaction atmosphere compared to the earlier period. The major downstream refrigerant R22 industry maintained a moderate recovery pace, with overall operating rates around 80%, providing order support for chloroform.

II. Orderly plant maintenance releases; supply remains manageable

Chloroform is a co-product of chloromethane production and cannot be independently adjusted. In the first half of the year, industry operating rates showed phased differentiation. Although new production capacity was released in the first half, no chloroform supply has yet flowed from new enterprises. In the first quarter, plants in the main production areas of Shandong and East China underwent short-term rotating maintenance, resulting in an average industry operating rate of around 80%, and supply was relatively loose. However, in the second quarter, due to factors such as costs and planned maintenance, the industry operating rate declined periodically, tightening market supply circulation and underpinning prices. Regional circulation was stable, regional price differentials remained steady, and no large-scale impact of low-priced goods on the national market occurred. Overall, the supply side remained under control.

III. Spring restocking supports rigid demand; major downstream performance is acceptable

Refrigerant R22, a core downstream of chloroform, entered an early stocking period for the cooling season in the first half of the year. In the first quarter, refrigerant factories concentrated on raw material procurement, with sufficient orders providing strong support for rigid demand. In the second quarter, stocking pace slowed down, but the existing air-conditioning maintenance market continued to consume, coupled with stable demand from fluoropolymers and PTFE, offsetting some demand reduction. In the first half, the capacity utilization rate of refrigerant R22 increased from around 50% at the beginning of the year to about 80%, providing a stable underpinning for chloroform. Demand from other downstream sectors remained rigid and stable throughout the year; although there was no significant increase, it continuously absorbed spot supply. Overall, the demand side formed a dual support from refrigerant season stocking and solvent rigid demand.

IV. Multiple supports weaken simultaneously; market trend is likely to weaken

Entering the second half of the year, the various positive factors that underpinned the market in the first half gradually subsided. The supply, demand, and cost sides all show bearish expectations. The market lacks effective support, and downward price pressure continues to accumulate, with the overall trend likely to fluctuate and weaken.

In the second half, new production capacity is still to be put into operation, and the new capacity from the first half is about to release volume. In the absence of large-scale concentrated maintenance, circulation supply of chloroform in the market will continue to increase. Moreover, after the peak season stocking ends, downstream procurement volumes will shrink, and producer inventories may gradually accumulate. Coupled with the annual reduction of quotas under the Montreal Protocol, domestic annual R22 production continues to decline. New air-conditioning plants have fully switched to new environmentally friendly refrigerants, with only the existing maintenance market providing slight consumption. Therefore, demand support for chloroform will weaken, which is the most core negative factor in the second half. With a weak supply-demand foundation, it is expected that the domestic chloroform market trend in the second half will generally weaken. However, attention should be paid to the impact from the cost side of chloromethanes.