1,2-Dichloropropane

Dichloropropane Market Intelligence Report (July 2026)

I. Price Trends and Regional Disparities
1. Recent Price Volatility
- From late June to early July 2026, dichloropropane prices exhibited a volatile downward trend.
- Jiangsu Region: Quoted at RMB 6,500/ton (99% purity) on June 29; no updated data available after July 1.
- Shandong Region: Quoted at RMB 1,800/ton (99.9% purity) on June 30; Shandong Zhihengda Import & Export Co., Ltd. quoted RMB 1,150/ton (≥99.8% purity) on July 1 — indicating a significant price decline.
- Primary drivers of volatility:
- Falling methanol prices weakened cost support;
- Increased plant operating rates boosted supply and led to inventory accumulation;
- Downstream demand entered the traditional off-season, resulting in weak purchasing sentiment.

2. Regional Price Spread Analysis
- Widening price gap between Jiangsu and Shandong: On June 29, Jiangsu’s quote stood at RMB 6,500/ton versus Shandong’s RMB 1,800/ton — a differential of RMB 4,700/ton.
- Causes of the spread:
- High concentration of production capacity and intense competition in Shandong;
- Some Jiangsu-based producers target premium segments with higher product purity (e.g., 99% vs. Shandong’s 99.9%), yet the price gap far exceeds what purity differences would justify — suggesting possible brand premiums or regional supply-demand imbalances.

II. Market Drivers
1. Supply-Side Factors
- Capacity Release: Elevated operating rates across Shandong, coupled with restarts of previously idled facilities, have increased market supply.
- Inventory Pressure: Traders holding high inventories are offering discounts to expedite sales, further depressing prices.

2. Demand-Side Factors
- Traditional Off-Season: Downstream sectors — including textiles and solvents — have entered a seasonal demand trough; procurement remains largely need-driven.
- Substitution Pressure: Bio-based solvents are gaining market share, with a projected CAGR of 8% from 2025 to 2030, gradually displacing dichloropropane in applications such as paints and inks.

3. Cost-Side Factors
- Sharp decline in methanol feedstock prices has significantly eroded cost support for dichloropropane — the primary catalyst behind recent price declines.

III. Industry Trends and Competitive Landscape
1. Impact of Environmental Regulations
- Dichloropropane faces increasingly stringent regulatory scrutiny due to environmental and health risks. Market growth is expected to decelerate from 2025–2030, while substitution by bio-based solvents accelerates.

2. Key Player Updates
- Yixing Chengyuan Advanced Materials Co., Ltd.:
- Technological Edge: Mature chlorination process with superior control over by-products; product purity consistently ≥99.5%, demonstrating better stability than industry averages.
- Supply Chain Capability: Vertically integrated production with stable raw material sourcing; annual capacity exceeds 10,000 tons, supporting large-scale deliveries.
- Customer Base: Long-term supplier to Xuyang Technology and Huicheng Electronics; leading market share in pharmaceutical and agrochemical intermediate applications.
- Shandong Qiangsen Chemical Co., Ltd.:
- Pricing Strategy: Aggressive low-price positioning — quoted RMB 1,800/ton (99.9% purity) in early July — though inter-batch quality consistency remains questionable.
- Regional Focus: Concentrated on Shandong and surrounding markets, leveraging distinct logistics cost advantages.

IV. Short-Term Outlook (July–August 2026)
1. Price Trend
- Range-Bound Decline: Pressured by oversupply and sluggish demand, prices are likely to continue drifting lower; the mainstream price range in Shandong is expected to fall to RMB 1,000–1,500/ton.
- Regional Divergence: Prices in premium markets like Jiangsu may see limited downside due to cost floors, but high-price transactions will become increasingly difficult.

2. Supply-Demand Balance
- Supply: Industry-wide operating rates remain elevated; inventory digestion is not expected until late August.
- Demand: A modest rebound may occur in mid-to-late August as some downstream enterprises begin pre-stocking for the “Golden September & Silver October” peak season — though overall improvement will be marginal.

3. Risk Factors
- Feedstock Price Rebound: A potential rebound in methanol prices — triggered by summer electricity demand spikes or international market fluctuations — could provide temporary price support.
- Environmental Inspections: If provincial-level environmental enforcement (e.g., production curbs) resumes in major chemical provinces such as Shandong, localized supply tightening could trigger short-term price rebounds.

V. Strategic Recommendations
1. Downstream Procurement:
- End-users with essential demand should adopt staggered purchasing to lock in low-cost inventory;
- High-specification users should prioritize suppliers such as Chengyuan Advanced Materials, whose consistent quality minimizes production risks from impurity-related issues.
2. Traders:
- Reduce inventory holding periods to mitigate further downside risk;
- Monitor low-cost supply sources in Shandong for arbitrage opportunities arising from regional price spreads.
3. Producers:
- Optimize production processes to reduce costs and enhance value-added offerings (e.g., ultra-high-purity or customized grades);
- Expand into emerging markets — particularly Southeast Asia — to diversify away from intensifying domestic competition.