In the second half of May, the dichloromethane market in Shandong showed a trend of rising and then falling, with weak consolidation. In the first half of the month, due to factors such as equipment maintenance and a phased decrease in operating rates, prices increased by over 14%. However, as we entered the second half of the month, with the gradual resumption of production and increased supply expectations, coupled with strong resistance to high prices in downstream markets, the market gradually shifted into a weak pattern, the trading atmosphere weakened, and the willingness of enterprises to ship increased.

As of May 29th, the mixed price of dichloromethane in Shandong region was 2175 yuan/ton, a decrease of 7.05% compared to the middle of the month.
Core driver analysis
Supply side: From tight to loose, pressure is released in a concentrated manner
In the first half of May, maintenance was concentrated, and the operating rate was low. The tight supply of goods pushed up prices to a high level. In the second half of the month, the maintenance equipment will resume production one after another, and the operating rate will rise to over 80%. The circulation of goods will increase rapidly, but the demand follow-up under high price suppression will be insufficient, and the mismatch between supply and demand will directly trigger a price correction. Enterprises offer discounts on shipments, further driving down market prices.
Cost side: Cost support from ‘weak’ to ‘none’
Some liquid chlorine companies are under pressure to ship, resulting in price reductions and a downward shift in the price center during the cycle. The trend of methanol market is running from strong to weak, and the market has been in a high-level stalemate stage where “cost increases cannot be transmitted” in the early stage. Downstream resistance to high prices is strong. When the price of methanol falls and the liquid chlorine market declines, it directly opens up the downward space for dichloromethane. The cost pressure of lowering prices and shipping for enterprises has significantly eased, coupled with increased supply and weak demand, leading to an imminent price drop.
Demand side: primary demand, high price resistance
Downstream industries such as refrigerants, pharmaceuticals, and coatings only maintain essential procurement, mainly relying on small orders and wait-and-see measures, lacking support for large orders. Under the influence of environmental substitution, traditional demand for coatings and other products continues to be weak, and only the demand for pharmaceuticals remains relatively stable, making it difficult to offset the overall weak demand.
Market forecast:
As the maintenance equipment gradually resumes production, the pressure on the supply side is gradually released; High prices suppress downstream enthusiasm for receiving goods and lead to insufficient demand follow-up; Cost support has weakened, and in the short term, dichloromethane is expected to fluctuate weakly. Attention should be paid to the raw material market and the actual progress of equipment resumption.