U.S. methylene dichloride prices increased in early December as higher chlorine and energy costs, along with strong export demand, subsequently steadied mid-month as trading started to slow down at the end of the year, with tight inventories likely to keep prices firm.
U.S. methylene dichloride prices started in December 2025 with a comfortable pace, sustaining the slow but positive upward movement since the final quarter of the year. During the first week of December, FOB Louisiana methylene dichloride prices saw a 4.2% week-on-week increase, or around USD 25 per ton. The uptick set a positive tone for the month, underpinned primarily by rising upstream costs rather than a sudden surge in downstream demand.
Feedstock inflation was a primary driver of the price increase. Spot chlorine values rose in concert with caustic soda co-product prices, which were sharply higher, to lift chlor-alkali production costs along the U.S. Gulf Coast. Henry Hub natural gas prices, meanwhile, drifted above November averages to further inflate energy costs that account for about 45% of methylene dichloride variable cash costs. The dual cost pressures emboldened methylene dichloride producers to reset higher offers at the beginning of December.
Operating conditions on the supply side for methylene dichloride were unchanged. Freeport, Plaquemine, and Geismar chloromethane units ran at average utilisation rates in the mid-80% range in November, steady from October and above the 2025 year-to-date average. Scheduled fourth-quarter maintenance programmes concluded on schedule in October. No unplanned outages were reported. Inventories, though, remained tight, with end-November stocks estimated at around 17 days of domestic consumption, significantly below the ten-year average of 24 days, mostly as a result of strong export liftings.
Export demand continued to determine the fate of the U.S. market. Most of the incremental production volumes were swiftly taken away by nominations into Mexico and Brazil, where methylene dichloride finds its application in refrigerants, agrochemicals, and industrial solvents. With the U.S. being a structural exporter, most sellers preferred to allocate volumes offshore to take advantage of positive arbitrage versus Europe and parts of Asia instead of easing prices to the domestic market.
Domestic demand for methylene dichloride was still constructive. Pharmaceutical solvent consumption showed steady momentum on the back of mid-single-digit growth in generic drug manufacturing, while that for polyurethane foam-blowing applications continued unabated despite the broader construction sector, still under annual contraction of about 2.7%. Industrial users, which are exempt from EPA restrictions on DIY paint stripper sales, maintained normal offtake levels for methylene dichloride.
By the week of 12 December, the methylene dichloride prices stabilized as FOB levels were held steady amidst quieter trading as the year-end progressed. Export prices also did not show any fluctuations on the back of limited spot activity and cautious downstream demand.
As per ChemAnalyst, the prices of U.S. methylene dichloride are likely to stay firm for the short term due to tight inventories and potentially lower operating rates around the year-end holidays, despite the overall slower pace of market activities.
