MC price trend in July: rising and then falling, dominated by supply and demand

1. Increase at the beginning of the month (7.1-7.14):
Tightening supply: Some enterprises have shut down for maintenance due to equipment failures, and the overall operating rate of the industry has dropped to around 70%. The market supply has decreased, and inventory levels are low.   

Price increase: Downstream companies have slightly restocked in anticipation of price increases, driving up the average retail price in the Shandong market, reaching a high point for the month with a growth rate of 6.04%.   

2. Late fall (7.15-7.28):
Supply recovery: Parking facilities are gradually restarting, industry operating rates have rebounded to 75%, and market supply has increased.   

Weak demand: Downstream consumers are resistant to high prices and only maintain essential purchases, resulting in accumulated inventory and price pressures leading to a decline. According to the Commodity Market Analysis System of Shengyi Society, as of July 28th, the average price of dichloromethane in Shandong Province has fallen, with a decrease of 0.59% for the month.

3. Cost side:

Raw materials methanol and liquid chlorine both fell, with insufficient support.

Methanol: Loose supply, weak demand, price decline, with a 5.16% decrease within the month.

Liquid chlorine: Demand recovery is slow.

4. Demand side: Seasonal suppression, with rigid procurement as the main focus

Traditional downstream (coatings, adhesives): Due to high temperatures, rainy seasons, and environmental inspections, the operating rate is low and demand is weak.   

Refrigerant (R32): Both production and sales are strong, but the proportion of dichloromethane produced by the enterprise is high, and the increase in external procurement is limited, resulting in insufficient market pull.   

Overall procurement model: Downstream suppliers tend to restock at low prices, with low acceptance of high prices, which suppresses the potential for price increases.

5.Outlook for the future:

The supply-demand game may continue or maintain a narrow range of fluctuations.