Weak supply-demand dynamics persist; dichloromethane market softens and declines.

Lead: The domestic dichloromethane market has recently maintained an overall weak and declining trajectory. With no substantive positive catalysts in the market, demand-side follow-through remains tepid. Trading activity is largely confined to essential-demand restocking, accompanied by a strong wait-and-see sentiment. As of now, the dichloromethane price in the Shandong region stands at 2,050 yuan/ton (range: 2,030–2,070 yuan/ton), down 6.82% from the level before the price reduction.

The supply side remains broadly loose, with industry operating rates holding at around 80%. Market supply is ample, and inventories at some enterprises continue to accumulate, exposing growing inventory pressure. Downstream end-use demand is lackluster; constrained by insufficient downstream operating loads, actual consumption capacity is limited, which in turn places clear upward constraints on feedstock from the downstream side. Bearish sentiment is spreading across the market. Downstream buyers and traders generally remain cautious in their approach, adhering to as-needed procurement with little large-scale restocking activity. With inventories climbing and trading limited to essential demand, enterprises are prioritizing shipments and proactively lowering offer prices, steadily pushing the market's transaction center downward. Regional price differentials have also narrowed under demand-side constraints.

The supply side is in a loose state. Chloromethanes output for the current period stood at 70,000 tons, a contraction of 1.13% from the previous week, while capacity utilization came in at 78.16%, down 0.87 percentage points from the prior period. Although Dongyue's and Huatai's units have both returned to full-load operation, Jinling Dawang's 240,000-ton unit and Luxi Chemical's units are operating at reduced loads, Jiangxi Liwen has shut down one 40,000-ton unit, and Huichang Yonghe has yet to restart. Since the volume lost to shutdowns exceeds the volume restored, both output and capacity utilization show a declining trend. At the same time, the co-product chloroform is under considerable sales pressure. Some enterprises have adjusted the output ratio of dichloromethane to chloroform, resulting in higher dichloromethane output. Combined with sluggish sales, enterprise inventories have largely accumulated, and this staged inventory build-up has become a key factor shaping the market.

Note: figures in 10,000 tons. Data source: Chempricehub Information.

The demand side continues to exhibit a weak trend overall, with insufficient essential-demand support across the entire downstream chain. Mainstream downstream applications of dichloromethane are showing clear divergence. Small and medium-sized downstream users in sectors such as solvents and cleaning agents are only making routine essential-demand replenishments, with as-needed purchasing becoming the dominant practice. In the core downstream refrigerant R32 sector, the comprehensive operating rate has fallen to around 50%. In August 2026, household air conditioner production is scheduled at 10.73 million units, down 6.23% year-on-year and 23.08% month-on-month; domestic sales production is scheduled at 5.87 million units, down 12.84% year-on-year and 33.14% month-on-month; and export production is scheduled at 4.86 million units, up 3.23% year-on-year and down 6.00% month-on-month. Refrigerant producers continue to implement an output-control, price-support business strategy, further dampening dichloromethane procurement demand.

Overall, the dichloromethane market this week is caught in a two-way weak pattern of ample supply and soft demand, with inventory holders generally cautious. In the near term, production still carries expectations of increase, and some enterprises face inventory pressure. Downstream terminal operating rates will see limited improvement, procurement will remain essential-demand driven, and the willingness to make bulk replenishments is weak, making it difficult to effectively expand trading volumes. The export market has shown no obvious improvement and cannot offset the pressure of domestic inventory backlog. The market is expected to continue fluctuating weakly in the short term, with prices likely retaining further room to move lower. However, chloromethanes producers are currently facing worsening losses, and the cost side will become an important factor constraining the expansion of the dichloromethane market's decline.