During this period, the Chinese dichloromethane market maintained a firm upward trend, with high raw material costs and declining operating rates among chloromethane producers remaining the key drivers of the market.

Ahead of the upcoming dual holidays, some downstream users and traders increased their stocking activities, providing relatively solid support on the demand side. Meanwhile, as the period came to an end, several producers announced or indicated upcoming maintenance and production cut plans, further strengthening bullish market sentiment.

Supported by tightening supply expectations and moderate pre-holiday restocking, the domestic dichloromethane market continued to move higher. As of the latest assessment, the mainstream dichloromethane price in Shandong reached RMB 2,485/tonne, up RMB 145/tonne, or 6.20%, from the beginning of the week.

1. Rising Raw Material Costs Increase Pressure on Chloromethane Producers

From the cost perspective, the methanol market remained relatively strong during the period. Port prices increased more significantly than inland prices, supported by persistently low inventories and sellers' willingness to hold back cargoes.

At the same time, liquid chlorine prices remained at high levels, supported by downstream purchasing demand. With both major raw materials for chloromethane production increasing in price, producers continued to face considerable cost pressure.

The average weekly production cost of chloromethane reached RMB 2,660/tonne, an increase of RMB 84/tonne, or 3.26%, compared with the previous period.

Although production costs remained high, the continued increase in dichloromethane and chloroform prices provided some relief to producers. The average weekly profit improved slightly to -RMB 439/tonne, narrowing the loss by RMB 37/tonne, or 7.77%, from the previous period.

Overall, however, chloromethane producers remained under significant profitability pressure.

2. Operating Rates Continue to Decline as Losses Persist

High production costs and limited profitability continued to weigh on industry operating rates.

During the period, total chloromethane production was approximately 62,100 tonnes, down 4.55% from the previous week. The industry's capacity utilization rate declined by 3.31 percentage points to 69.31%.

Among major producers, Jinling Dawang reduced the operating load of its 240,000-tonne/year unit to around 60%. Other producers that had previously reduced operating rates showed no clear plans to increase production, resulting in a continued decline in overall output and capacity utilization.

Looking ahead, Jinling Dawang is expected to conduct maintenance on its 240,000-tonne/year unit, although the specific timing remains to be confirmed. In addition, Dongying Huatai also has a maintenance plan. These developments could further reduce regional operating rates and tighten spot availability.

Against this backdrop, producers' reluctance to release inventories is expected to continue providing support for dichloromethane prices.

3. Demand Remains Relatively Stable with Moderate Pre-Holiday Restocking

On the demand side, overall market activity remained relatively stable, although trading sentiment fluctuated during the period.

Downstream operating rates showed limited changes compared with the previous period. However, with the upcoming dual holidays approaching, some downstream users and traders increased moderate restocking based on expectations of tighter supply and potentially higher prices.

This pre-holiday purchasing activity helped reduce dichloromethane inventories to some extent and provided additional support to the market.

In the East China market, mainstream offers for R32 refrigerant were reported at approximately RMB 63,500–64,500/tonne.

R32 producers continued to mainly ship against confirmed orders while controlling production to limit spot availability. Meanwhile, during the current export window, suppliers have remained active in overseas shipments to ensure the completion of export quotas.

The R32 industry's operating rate remained at around 44%, unchanged from the previous period. Given the relatively limited demand space, maintaining a balanced supply-demand relationship appears to remain the main operating strategy for producers.

Market Outlook

Looking ahead, the dichloromethane market is likely to remain supported by high raw material costs, declining chloromethane operating rates, scheduled maintenance, controlled spot supply, and moderate pre-holiday restocking.

The key factors to monitor will be changes in methanol and liquid chlorine prices, the implementation of maintenance plans at major production facilities, downstream purchasing activity, and changes in spot inventory levels.

If production cuts and maintenance proceed as scheduled, the reduced supply side could continue to provide support for dichloromethane prices in the near term.