Price trend:
In early September, the dichloromethane market in Shandong continued its downward trend and did not experience the expected peak season of “Golden September”. The core reason is that the market supply is loose while demand is weak. The operating rate of the supply side remains high, while the expected “golden September and silver October” on the demand side has not been realized. Trading in the market is poor, and enterprises are leading the way in shipping, reducing inventory through discounts and promotions, bidding for sales, and prices continue to bottom out. According to the monitoring of the commodity market analysis system of Shengyi Society, as of September 9th, the average price of dichloromethane water in Shandong Province was 1940 yuan/ton, a decrease of 2.76% from the beginning of the month and a year-on-year drop of 28.94%.
analysis of influencing factors
Supply side: High production levels, inventory pressure
Affected by weak demand, the overall operating rate of methane chloride plants in the industry has slightly fallen to around 85%, still at a high level, with loose supply on site. Downstream procurement enthusiasm is insufficient, and enterprises are under pressure to ship. In order to alleviate inventory pressure and reduce prices for sales, the market may mainly observe consolidation.
The changes on the supply side are crucial: if more companies in the future reduce production load or shut down due to cost pressures, malfunctions, or unplanned maintenance, it may effectively alleviate the supply pressure on the market and provide support for prices.
Cost side: Methanol increases, cost support strengthens
In terms of raw material methanol, the demand for olefins in mainland China remains strong. Against the backdrop of expectations from Jinjiu, downstream buyers have a positive attitude towards price increases, and the short-term market trend tends to be strong and volatile. As of September 9th, the benchmark price of methanol in Shengyi Society was 2271.67 yuan/ton, an increase of 1.72% from the beginning of the month. If the price of methanol continues to rise, it may compress the production profit of dichloromethane, and the willingness of enterprises to raise prices may increase. In terms of liquid chlorine, there is insufficient demand follow-up in Shandong region, and companies offered discounts and lowered prices in the middle of the week. Currently, prices remain unchanged from the beginning of the month.
Demand side: Purchase on demand, waiting for the traditional “golden September and silver October” peak season to boost
The overall performance of downstream industries is poor, with high temperatures and large-scale domestic events affecting the operating rates of some downstream enterprises. Many downstream enterprises maintain a strategy of purchasing on demand, lacking the willingness to stock up on large quantities.
Refrigerant R32 is widely used in fields such as air conditioning, and downstream demand continues to be strong. However, production quota restrictions have led to a tight supply of goods in the market, and companies have a strong reluctance to sell at high prices. It is expected that the average price will rise to 62000-64000 yuan/ton from September to November. Due to limited production quotas and limited demand for raw materials, the continuous upward trend of the market has not driven the rise of raw material dichloromethane.
Traditionally, September and October are the peak seasons for industrial production. We need to closely monitor the recovery of downstream actual demand. If downstream demand can rebound beyond expectations, it may drive a wave of replenishment demand.
Future prospects
The dichloromethane market had a sluggish start in September, with weak demand being the core issue. Whether prices can rebound depends on whether there can be a significant contraction on the supply side, such as large-scale equipment maintenance, and whether the traditional “golden September and silver October” peak season can truly boost downstream demand.
In the short term, the possibility of a significant rebound in the market is relatively small, and it is expected to continue to operate mainly in a volatile bottoming out or low position.