Dichloromethane

I. Recent Market Dynamics Intelligence
1. Price Trends
- The benchmark price of dichloromethane (DCM) on April 1, 2026, stood at RMB 2,620/ton. From April 2 to April 6, the reference price remained stable at RMB 2,525/ton—a decline of 3.63% compared to April 1.
- Prices exhibited significant volatility in March: the reference price was RMB 1,755/ton on March 1, surged to RMB 3,265/ton on March 13 (an increase of 86.04%), then retreated, closing at RMB 2,545/ton on March 31.

2. Regional Price Disparities
- Shandong Province: Quotations ranged from RMB 2,200 to 3,000/ton; major suppliers include Shandong Jinling and Luxi Chemical.
- Guangdong Province: Quotations ranged from RMB 3,500 to 3,600/ton; key suppliers are Guangxi Jinyi and Ningbo Juhua.
- Jiangsu Province: Quotations ranged from RMB 2,200 to 3,200/ton, with distinctions between domestic and Limin-branded products.
- Hubei Province: Quotations ranged from RMB 1,500 to 3,200/ton, reflecting quality differences between industrial-grade and national-standard premium-grade products.
- Other Regions: Some manufacturers in Tianjin quoted as low as RMB 1,000/ton; premium-grade DCM in Henan and Hunan provinces traded within RMB 2,700–2,900/ton.

3. Import/Export Situation
- In February 2026, China’s DCM imports totaled 6.635 tons—a month-on-month decline of 67.78% and a year-on-year decline of 28.35%. Exports amounted to 13,156.5 tons, down 38.66% MoM and 21.66% YoY.

II. Analysis and Assessment
1. Supply Side
- Severe overcapacity persists: As of end-2023, China’s effective annual DCM production capacity exceeded 1.8 million tons, while apparent consumption stood at only 973,000 tons—resulting in a capacity utilization rate below 55%. Although capacity expansion has slowed in 2026, the high base capacity remains. Industry operating rates remain elevated; consequently, high utilization continues to suppress prices as the core structural factor—only during periods of concentrated plant maintenance does supply pressure ease temporarily.
- Accelerated phase-out of outdated capacity: Policy mandates green retrofitting or decommissioning of aging facilities operating for over 20 years. In 2025, persistently low prices and losses breached the survival threshold for high-cost producers; small- and medium-sized plants lacking integrated upstream-downstream support and lagging technologically will be forced to exit—driving industry consolidation toward integration and high-end specialization.

2. Demand Side
- Demand structure is bifurcated, yet overall demand remains weak. Refrigerant R32 remains the largest downstream application: its 2026 production quota is ~282,000 tons, implying DCM consumption of ~507,000 tons—an incremental growth of only 0.4% YoY. R32 thus continues serving as the market’s ‘ballast’, though its vertically integrated procurement model offers little stimulus to external market demand.
- Traditional demand is contracting rapidly: Foam-blowing agents have been fully banned; aerosol propellants and certain mold-release agents face tightening regulatory restrictions; and conventional solvent applications continue losing share to low-toxicity, eco-friendly alternatives. Demand from pharmaceuticals and metal cleaning sectors is expected to remain sluggish.
- Export growth is decelerating amid rising policy risks: 2026 export growth is projected to slow markedly versus 2025’s 44.4%. DCM has been added to China’s list of precursor chemicals subject to export control; several countries have been newly designated as specific controlled regions, increasing compliance costs and potentially constraining export growth in certain markets.
- Emerging demand remains limited: Though demand from battery wet-process separator films and fine chemical applications shows growth, its share of total consumption remains small—insufficient to offset declines in traditional segments.

3. Cost Side
- Methanol price fluctuations provide temporary support: Methanol’s 2026 price center is forecast at RMB 2,100–2,300/ton, exhibiting strong long-term correlation with DCM price indices. However, under persistent supply overhang, methanol price increases cannot be fully passed through to DCM end-prices—only offering temporary cost-floor support during trough periods.
- Liquid chlorine markets remain oversupplied and demand-weak, keeping prices low. Vertically integrated enterprises with captive chlor-alkali facilities sustain clear cost advantages, whereas producers reliant on external liquid chlorine procurement face mounting cost pressures.

III. Outlook
1. Price Range
- DCM prices in 2026 are projected to fluctuate within RMB 1,700–2,300/ton—low points approaching historical lows seen in 2025, while highs remain capped below RMB 2,500/ton due to structural supply-demand imbalance.

2. Volatility Pattern
- Prices may stage short-term rebounds of 2%–5% during periods of concentrated plant maintenance or temporary export surges.
- Conversely, during seasons of ample capacity release and traditionally weak demand, prices will likely resume a gradual downward drift.

3. Industry Trends
- The sector is entering a new phase characterized by accelerated capacity rationalization and deepened structural optimization. Yet the fundamental supply-demand imbalance remains unresolved; the overall 2026 market will be dominated by weak, range-bound trading. Structural opportunities—not aggregate growth—will define the landscape. Leading enterprises with chlor-alkali integration, technological advantages, and robust export channels will continue gaining market share, while high-cost, small-scale producers will accelerate their exit—further elevating industry concentration.