For the Quarter Ending March 2022
North America
In Q1 2022, prices of Methylene Dichloride remained on the upper end due to the rise in feedstocks Methane and Chlorine costs. Limited Chlor Alkali production rate and surging cost of Caustic soda and Chlorine pushed the price of Methylene Dichloride. As production at some caustic soda factories in the United States remained below the desired level, the availability of feedstock Chlorine remained limited. Ongoing Russia-Ukraine conflict affected the production rate of the major Methylene Dichloride producers in the east that resulted in price hike in the international market. In this quarter, prices of Methylene Dichloride surged by 6% as compared to the previous quarter.
Asia Pacific
Rise in Chlorine and Methane market in China due to supply shortage surged the prices of Methylene Dichloride in the domestic market. Low production rate coupled with strong cost support resulted in such trend. However, since October 2021, the low operating rate of Hou’s operation and tight supply of Liquid chlorine increased the prices. In India, the demand for Methylene Dichloride in plastic and food industries remained robust throughout the quarter which supported the price. In this quarter, price of Methylene Dichloride surged by 5% in this quarter compared with last quarter of 2021. Minimal regulation and mounting industrial growth in the end user industry were the parameters for the rise in demand for Methylene Dichloride. In India, prices for Methylene Dichloride during March were observed at USD 818/ton (Spot) Ex-Ahmedabad.
Europe
Shortage of raw material Chlorine and Methane led to the unprecedented rise in the cost of Methylene Dichloride in Europe. Chlorine accessibility in Europe stayed restricted because of a drop in Caustic Soda operating rates because of high energy costs and environmental crisis influencing its manufacturing. In the first quarter of 2022, the cost of Methylene Dichloride increased by 8% compared to previous one. Exports from Germany to other European regions additionally increased and major producers revised the prices of Methylene Dichloride for the domestic as well as for international market.
For the Quarter Ending December 2021
North America
In the Quarter 4 of 2021, prices of MDC showed a significant rise across the North America region as downstream manufacturers boosted up run rates for catering to the regional demand pattern. Market sentiments of feedstock Caustic Soda remained mixed throughout Q4 in North America. Increase in the price of raw material during early Q4 was seen due to shortage of Chlorine in the region. Force majeure by Oxychem on its chlor alkali plant continued to impact prices in Q4. Driven by high upstream rates, prices of raw material Methanol also showed an upward trend in Q4.
Asia Pacific
In the final quarter of 2021, prices of Methylene Dichloride (MDC) decreased in the domestic market. This decrease was majorly attributed to the stagnancy in the downstream demand in the international market. Volatile in the prices of feedstock due to fluctuation in upstream values proportionally impacted the prices of MDC. Additionally, production rates in China paved normalcy after prolonged power crises in October. Prices of Methylene Dichloride in India were assessed between USD 725-825 per MT in the final weeks of Q4 2021.
Europe
The price of MDC in Europe increased in the fourth quarter of 2021, as market sentiments for the raw material Chlorine remained unchanged. The price of Chlorine grew sharply during Q4 due to limited product availability, as production in the chlor alkali plants remained stressed, producers sought the greatest value to compensate for rising energy costs. Furthermore, a spike in natural gas costs in Europe has resulted in several power outages due to which few European chemical industries raised the prices of their products.
For the Quarter Ending September 2021
North America
In the third quarter of 2021, the prices of Methylene Dichloride (MDC) witnessed a significant rise across the North American region as producers ramped up run rates to cater to improving demand patterns. A leading producer OxyChem declared a force majeure at its chlorine, caustic soda, and related products capacity which caused tightness in the chlorine supplies. Driven high upstream rates, prices of raw material Methanol showed an upward trajectory in Q3. The impact of Hurricane Ida over domestic production sent ripples to the region's MDC pricing. The storm forced precautionary shutdowns of several petrochemical plants from Baton Rouge to New Orleans in the US between Aug-Sep.
Asia Pacific
In the Asia Pacific region, the prices MDC showcased an upward trajectory in the 3rd quarter of 2021. In India, a major producer of Methylene Dichloride increased its product prices in August due to the low spot availability of the product. Methylene Dichloride prices shot up significantly in Q3 due to domestic scarcity and high raw material pricing. Prices escalated from USD 831/MT to USD 1103/MT from July to September. While the demand from the domestic market remained firm, and imports from China stayed halted amid port-congestion across major ports. In addition, a significant rise in freight costs further amplified the overall price hike for several commodities. China observed slowed demand but high pricing due to cost support from methanol.
Europe
The European market observed a hike in the prices of Methylene Dichloride during Q3 of 2021. Low capacity utilization rates at feedstock Chlorine plants were seen imparting substantial gains to MDC pricing in Q3. Demand from the downstream sectors remained firm throughout the quarter, however, a disruption in the supply was witnessed. Although operations rebounded later in Q3, but the supply side decreased shortly. Restricted availability of Asian Methylene Dichloride due to shortage of shipping containers and soaring freight charges are other factors resulted in increased pricing of MDC during Q3.
For the Quarter Ending June 2021
North America
During the second quarter of 2021, Methylene Dichloride (MDC) supplies in the North American region showed improvement over the first quarter as manufacturing units picked up around the US Gulf coast which had largely been impacted by the winter storm Uri. The resumption of several production units and ample production of Methanol kept the upstream availability sufficient to meet production requirements. Offtakes from the downstream refrigerant industries surged amidst the peak demand season during the second quarter. The prices of Methyl Dichloride (MDC) were slightly on uptrend taking cost support from the upstream Methanol and Chlorine.
Asia Pacific
Methylene Dichloride (MDC) pricing trend in the Southeast Asian region remained soft amid sufficient inventories of the product in the domestic market. The market sentiments across India were weighed under slow offtakes due to reduced industrial consumption amidst the lockdown restrictions to contain the spread of second COVID wave in India. Furthermore, ample availability of upstream Chlorine kept the raw material prices for the Indian producers at ease. Ex-Works Ahmedabad (India) Methylene Dichloride prices was assessed at USD 728 per tonne in June. Whereas in China, supplies were curtailed due to some maintenance turnarounds. Jinmao Chemicals remained on a turnaround in mid-April, whereas Dongyue Chemicals was heard operating at 60% efficiency due to ample product availability. Demand in the Chinese domestic market improved towards the end of Q2 as offtakes from the refrigerant industries peaked with the arrival of summer season.
Europe
Methylene Dichloride (MDC) supplies in the European region improved with improved production rates of feedstock Methanol. Furthermore, the market outlook in term of supply was supported with the better import volume from the USA. Demand was bolstered as enquiries from the downstream refrigerants industries surged specially from the Mediterranean region, while observing the seasonal demand throughout the quarter. Some reported tightened availability of Methylene Dichloride due to shortage of shipping containers and soaring freight charges.
For the Quarter Ending March 2021
North America
MDC supplies were extremely tight during the first quarter as a larger part of the USA MDC production was affected amidst freeze weather conditions in the Gulf region which forced several petrochemical and chemical plants to shut the production for more than two weeks followed by the limited availability of the key feedstock, which further weakened the exported volumes. Higher shipping cost to Asia added to reduced traded volumes. Demand surged as the offtakes were improved from the downstream pharmaceutical sector. Skyrocketing prices of Methanol proportionally impacted MDC prices in the North American region.
MDC supplies in the region were balanced throughout the first quarter of 2021, as several Chinese players ramped up production to meet rising domestic demand from the end use industries. While supplies remained curtailed for a significant portion of February due to Chinese Lunar New Year Holiday, offers were raised as demand from the regional buyers was lifted due to post holiday restocking. Surging Methanol further impacted the prices of Methylene Dichloride in China as Ex-Works Qingdao rates were around USD 688/MT in March.
Europe
During the first quarter of 2021, the European Methylene Dichloride market remained affected by curtailed supplies due to production issues in the northwest region amid severe cold weather and transportation lag. Significant reduction in imports and lack of feedstock led to shut down of some of the major plants for over a week in the region. With a strong recovery anticipated in the downstream automotive and construction industries, MDC consumption is likely to increase in the upcoming quarter.
For the Quarter Ending December 2020
Asia
Methylene Dichloride demand in Southeast Asia continued to strengthen following increased number of enquiries from buyers. In China too, demand for the product was heard paving its way back but it remained far below the pre-pandemic levels. Although demand in India remained stale but the prices witnessed a steep hike in the second half of the quarter, buoyed by its delayed imports due to congestion along several routes. Consequently, Methylene Dichloride prices in India were averaged at around USD 539 per MT in the quarter ending December 2020. Supply remained sufficient despite few turnarounds heard in China as manufacturers refrained from mounting up inventories to abate any hurt to their margins. In Northeast Asia, plant operating rates remained same throughout the quarter following no major change observed in the product demand and supply fundamentals.
North America
Since a significant amount of Methylene Dichloride is imported from Europe, several maintenance turnarounds and unprecedented increase in the freight charges limited the supply of Methylene Dichloride in the North American market and led to a steep increase in its prices during the quarter. Demand also witnessed prominent recovery from solvent and pharmaceutical applications but still remained way below pre pandemic levels. Container shortage exacerbated the supply crises in the region and consequently laid a direct influence on its prices. However, traders remained optimistic that the supply imbalance would surely reduce by the end of February.
Europe
Supply of Methylene Dichloride in the European market remained tight in Q4 following appreciable recovery in demand against several production issues in the first half of the quarter ending December. Increase in freight rates and high feedstock cost considerably affected the supply from its major exporter-China. Olin Corporation announced a maintenance turnaround at its Europe plant in December which further tightened the domestic supply for few months. Demand for Methylene Dichloride witnessed a substantial recovery in the second half of 2020 backed by its increased consumption from the pharmaceutical industry.
