SunSirs: The Upward Momentum of Dichloromethane Eased, and It Is Stable Within a Upward Tone in a Narrow Range in the Short Term

According to SunSirs, the dichloromethane market shifted during the second half of July from a phase of "sharp gains" to a trend characterized by narrow fluctuations—remaining steady with a slight upward bias—as volatility subsided; while manufacturers maintained a willingness to support prices, the follow-through in actual trading slowed significantly. As of July 30, the bulk price of dichloromethane in the Shandong region stood at 2,220 RMB/ton, marking a 4.1% increase compared to the middle of the month.

Analysis of Key Drivers

Cost side: Support was temporary and marginally weakening

Geopolitical events have driven market sentiment and caused volatility in international oil prices, placing downward pressure on methanol despite its high price level and hindering sustained gains in the spot market; meanwhile, port inventories have rebounded following the arrival of imports, and peak-season optimism has cooled, causing the methanol market's center of gravity to shift downward. In contrast, liquid chlorine prices have surged—rising from -150 RMB/ton mid-month to a range of 300-500 RMB/ton—yet this cost-side factor serves only to establish a firm price floor for dichloromethane rather than driving a significant price spike.

Supply side: High operating rates and regional disparities, with no overall shortage of supply.

The industry's aggregate operating rate remains at a relatively high level of 78%-80%, with no large-scale, concentrated maintenance shutdowns. Major production units in East China are stable, operating loads in the Southwest have rebounded, and some units in North China are running at lower loads; while regional price differentials exist, overall supply remains ample. Coupled with low industry inventory levels, prices are unlikely to see a sharp decline, yet a sustained supply gap is also unlikely to emerge.

Demand side: Traditional off-season; supported only by essential demand for refrigerants.

The traditional off-season trend persists; in July, demand for traditional solvents—used in high-temperature coatings, adhesives, and pharmaceutical/agrochemical intermediates—remained weak, with downstream buyers placing only small, essential orders rather than locking in long-term contracts. R32 refrigerant serves as the primary stabilizing factor; stocking for the peak air-conditioning season and export orders provide a demand floor that prevents a sharp price collapse, though this is insufficient to drive active restocking across the entire industry chain. Export activity generally tracks overseas demand for refrigerants and related products, and July saw no significant growth exceeding expectations.

Market outlook

On the cost side, the downward shift in methanol prices has weakened raw material support; meanwhile, demand remains in a traditional off-season, with downstream sectors—such as coatings, pharmaceuticals, and agrochemicals—lacking the impetus for active restocking. With only essential demand for refrigerants providing a floor and a lack of bullish drivers to spur sustained volume growth, it is difficult for prices to surge significantly higher. Furthermore, high industry operating rates and ample overall supply make it unlikely for a persistent supply gap to emerge, meaning manufacturers lack the transaction volume needed to sustain price hikes. High liquid chlorine prices have solidified the cost floor; overall industry inventory pressure is manageable, and factories remain willing to hold firm on prices. Stable essential demand for R32 refrigerants limits the potential for a sharp decline, making a significant drop unlikely.

In the short term, the dichloromethane market is likely to fluctuate within a narrow range, maintaining a steady-to-firm tone, though upward momentum remains limited.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.