Dichloromethane Market Report: Stabilizing with Firm Bias in Late July, Limited Upside Volatility

Dichloromethane Market Report: Stabilizing with Firm Bias in Late July, Limited Upside Volatility

According to spot market data from 100ppi, the dichloromethane (DCM) market stopped its fast price rise in late July and turned stable with small price changes. Suppliers still intended to keep prices steady, but downstream buyers slowed their purchases significantly. As of July 30, the bulk DCM price in Shandong area was RMB 2,220 per ton, up 4.1% compared with mid-July.

Key Market Drivers

Cost Factor: Less Support but Price Floor Secured

Raw material cost support for DCM became weaker in late July. Global crude oil prices moved up and down, keeping methanol prices at elevated levels but without further upward momentum. More methanol goods arrived at ports and raised stock levels, which cooled market sentiment and pushed methanol prices lower. Meanwhile, liquid chlorine prices went up greatly, rising from RMB 150 per ton in mid-July to RMB 300–500 per ton. Overall, raw material costs could only prevent DCM prices from falling sharply, but could not drive big price hikes.

Supply Factor: High Production and Sufficient Goods with Regional Differences

DCM factories kept high production levels in late July, with the overall operating rate staying at 78%–80%. No large-scale factory shutdowns for maintenance happened. Production conditions differed by area: East China plants ran stably, Southwest China raised production output, while some North China plants ran at low capacity. The overall market supply was enough and industry stocks remained low. This situation prevented sharp price declines while also capping sustained upward momentum.

Demand Factor: Weak Off-season Demand, Refrigerant Purchases Support Prices

July is the usual low-demand season for DCM. Continuous hot weather weakened market demand for coatings, adhesives, medicine and pesticide raw materials. Downstream buyers only placed small orders for daily use and avoided signing long-term contracts. The R32 refrigerant industry was the main stable demand source. Stock preparation for air conditioner production and export orders prevented a sharp market downturn. Even so, this steady demand did not drive large-scale restocking across the whole industry, and DCM export volume had no obvious growth in July.

Market Outlook

DCM prices have limited room to rise in the short term. Lower methanol prices reduced cost support, while downstream demand is weak in the traditional off-season with no active restocking. Factories keep high production, ensuring sufficient market supply, so there is no strong trading volume to push prices higher.

However, prices are unlikely to drop sharply. High liquid chlorine prices support production costs, low industry stocks encourage suppliers to maintain firm pricing, and stable purchases from the R32 refrigerant industry effectively reduce downside market risks.

In short, the domestic DCM market will stay stable with small price changes in the near future, with limited upside potential.