For the Quarter Ending June 2024
North America
In Q2 2024, the Methylene Dichloride (MDC) market for the North American region has faced significant downward pressure, resulting in a marked decrease in prices. This quarter has been characterized by several key factors that have influenced market prices. The oversupply of MDC, augmented by increased production rates from major manufacturing plants, has played a critical role in depressing prices. Ample supplies have been met with tepid demand, particularly from the downstream solvent sector, including paint and coatings. Export supply at non-competitive levels has further compounded the issue, limiting any upward price momentum.
Focusing on the USA, which has experienced the most substantial price changes, the overall trend has been decidedly negative. The seasonal recovery in demand, typically expected during this quarter, has been insufficient to offset the high inventory levels and sluggish market purchases. In comparison to the same quarter last year, MDC prices in the USA have plummeted by 38%. Furthermore, the price drop from the previous quarter in 2024 stands at 17%, underscoring the persistent bearish sentiment. The first and second halves of the quarter saw a 15% decline, reflecting a consistent downward trajectory.
Concluding the quarter, the price of Methylene Dichloride stabilized revealing a predominantly negative pricing environment. The cumulative effect of high supply, weak demand, and a sluggish trading atmosphere has exerted consistent downward pressure on MDC prices in the USA, signalling a challenging market landscape throughout Q2 2024.
APAC
In Q2 2024, the Methylene Dichloride (MDC) market in the Asia-Pacific (APAC) region exhibited notable stability in pricing, largely underpinned by a balanced interplay of supply and demand dynamics. This quarter was characterized by consistent market conditions, with prices holding steady due to several influencing factors. Primarily, the stability in feedstock Methanol prices played a crucial role, providing a predictable cost base for MDC production. Additionally, limited trading activity and cautious purchasing strategies, mainly driven by oversupplies and moderate demand from downstream industries, further anchored prices. The solvent market, a key consumer of MDC, displayed subdued purchasing patterns, reinforcing the market's steadiness. Focusing on China, the region experienced the most significant price fluctuations. Despite the overall stable sentiment, China's MDC market was impacted by seasonal factors such as high temperatures, boosting demand for refrigerants like R22. However, this did not translate into substantial price volatility. Compared to the same quarter last year, there was a -11% decrease in MDC prices, indicating a long-term downtrend. Yet, from the previous quarter in 2024, prices rose by 4%, reflecting short-term adjustments driven by temporary supply constraints and operational upticks in domestic plants. The first and second halves of the quarter showed no difference in pricing, underscoring the uniform market conditions. This quarter's pricing environment has predominantly been stable, with only minor fluctuations attributable to predictable seasonal and supply-side factors, maintaining the overall equilibrium in the market.
Europe
In Q2 2024, the European Methylene Dichloride (MDC) market exhibited a discernible upward pricing trend. This quarter saw significant factors influencing MDC prices, including heightened demand from downstream solvent industries, robust trading activities, and a tight supply environment. The market dynamics were shaped by the increasing cost of feedstock methanol, which provided marginal cost support for MDC production. Additionally, the market's adaptability to seasonal upticks in coolant demand, driven by rising temperatures, further bolstered prices. Focusing exclusively on Germany, which experienced the most notable price changes, the MDC market demonstrated an overall positive trend. Germany's market saw a 2% increase from the previous quarter, reflecting strong purchasing levels and elevated feedstock costs. However, compared to the same quarter last year, prices reflected a modest decline of 3%, indicating a nuanced pricing environment. The first half of the quarter saw a 1% price increase over the second half, underscoring the influence of seasonality and sustained demand. The correlation between these factors highlights a complex pricing landscape, where increasing demand and tight supply drive prices amidst a backdrop of fluctuating feedstock costs. Concluding the quarter, the price of Methylene Dichloride reflected a resilient market capable of adapting to changing economic landscapes and seasonal factors. Overall, the pricing environment for MDC in Germany during Q2 2024 has been predominantly positive, with key drivers including strong market fundamentals and adaptive trading strategies ensuring a stable yet upward trend in prices.
For the Quarter Ending March 2024
North America
The North American market for Methylene Dichloride in Q1 2024 experienced a downward price trend, with prices decreasing compared to the previous quarter. Several factors influenced market prices during this period. Weak demand from downstream industries, particularly the solvent and refrigerant sectors, contributed to the sluggish market sentiment.
Additionally, high inventory levels and limited utilization of existing stocks further weighed on prices. The overall market situation was bearish, with an abundance of supply and low demand. In the USA specifically, the price of Methylene Dichloride decreased by 6% compared to the previous quarter and by 17% compared to the same quarter last year.
The price trend in the USA remained stable throughout the quarter, with no significant changes observed between the first and second half of the quarter. In March 2024, the price trend of Methylene Dichloride in the USA was recorded at USD 730/MT FOB Louisiana. This reflects the prevailing market conditions characterized by weak demand, high supply, and limited trading activities. Overall, the pricing environment for Methylene Dichloride in the North America region in Q1 2024 was negative, with prices declining due to weak market fundamentals and subdued consumer demand.
APAC
The pricing environment for Methylene Dichloride in the APAC region during Q1 2024 has been characterized by a consistent decrease in prices. Several factors have influenced market prices, leading to a negative sentiment in the market. Overall, the quarter has seen a significant decline in prices compared to the same period last year. The first half of the quarter saw a decline of 6% in prices compared to the second half, indicating a continued downward trend. The quarter-ending price for Methylene Dichloride in China is USD 268/MT EXW-Qingdao, reflecting the overall decrease in prices. The market sentiment remains negative, with prices continuing to decline. The Methylene Dichloride market was characterized by weakness and consolidation, with mainstream bulk water prices for Methylene Dichloride in the Shandong region trading weakly, continuing the downward trend. Downstream production experienced a gradual increase, accompanied by low inventory levels for merchants and terminals. However, they exercised caution in assessing and inquiring about market conditions outlook, primarily basing their support for Methylene Dichloride on demand.
Europe
The European market for Methylene Dichloride in Q1 2024 has experienced a bearish pricing environment, characterized by sluggish movement and declining prices. Several significant factors have influenced market prices during this period. Firstly, there has been a decline in fresh sales and subdued buying activities, resulting in reduced demand for Methylene Dichloride. This has been attributed to reduced sales volumes, pessimism in market sentiment, and production interruptions due to the Red Sea crisis. Additionally, the Methanol market, a key feedstock for Methylene Dichloride, has shown a stagnant trend with limited cost support, further impacting prices. In Germany, which has seen the maximum price changes, the market has been affected by weak demand, leading to low purchases and a decline in prices. The downstream sectors of paint and adhesive, which are major consumers of Methylene Dichloride, have not shown signs of recovery in demand. The market has also been influenced by high supply levels and limited trade availability to the Asian region due to the Red Sea crisis. Overall, the pricing environment for Methylene Dichloride in Q1 2024 has been negative, with prices declining and limited trading activities. There has been a bearish market sentiment, with high supply and low demand impacting prices. The quarter-ending price for Methylene Dichloride FOB Hamburg in Germany was USD 695/MT.
For the Quarter Ending December 2023
North America
The North American Methylene Dichloride market observed a bearish trend in the Q4 2023 due to weak demand and surplus production. The downstream solvent in the Paint and coating market exhibited muted demand, and suppliers were purchasing the product on a need-to basis.
The product inventories were adequate to fulfill market requirements, and major producers offered discounts on prices due to higher production rates and weakening demand from downstream ventures. The top three factors that impacted the market were limited demand, surplus production, and weak trading fundamentals. The USA witnessed a decline in Methylene Dichloride prices by 1.17% in November 2023 due to lackluster demand and export prices hitting lows.
The price trend of Methylene Dichloride declined by 12% in Q4 2023 when compared with Q4 2022 while the percentage change from the previous quarter was -10%. During Dec 2023, quarter the price of Methylene Dichloride FOB Louisiana in the USA was USD 764/MT. The stagnating demand and surplus production to fulfil the market need cause the Methylene Dichloride market in the USA to collapse.
APAC
Methylene Dichloride prices in the Asia Pacific region during Q4 2023 saw mixed market sentiment due to fluctuations in the supply/demand equilibrium. The downstream solvent industry remained flat, and market trades were primarily on a need-to-basis.
In China, the overall supply of Methylene Dichloride was adequate to fulfill the demand from the downstream enterprises, with adequate inventory in the Shandong region. The decline in the feedstock Methanol market lowered the production cost of Methylene Dichloride among significant production units. During Dec 2023, the price of Methylene Dichloride in China was USD 373/ton FOB Qingdao.
In India, the market trades gain support from the previous quarter. The major reason for the higher deals for the commodity in India was higher spot level purchases. There was a low inventory among the region, and high purchasing appetite was expected to alter the price trend. The exports of Methylene Dichloride from China to India and other Asian regions improved with demand recovery. Domestic market purchases and higher spot market purchases boost in the Methylene Dichloride in India with crippling product availability.
Europe
In the fourth quarter of 2023, the European Methylene Dichloride market experienced mixed trends. Despite some fluctuations, overall market conditions remained stable when compared with Q3 2023. In the H1 of Q4 2023, there was a low supply of Methylene Dichloride in Germany, leading to increased prices. Additionally, high demand from downstream industries, such as solvents and paints, contributed to the bullish market sentiment.
However, in the later half, sluggish purchasing appetite and low bidding also had an impact on the market, resulting in limited cost support. However, it is important to note that the market was already experiencing low supply, which could have been exacerbated by any unplanned disruptions in production.
During Dec 2023, the Methylene Dichloride in Germany was observed to be USD 714/MT (FOB Hamburg). In Dec 2023, the price trend witnessed a bearish market trend in the wake of sluggish demand for the fresh stocks and lackluster purchasing activities.
For the Quarter Ending September 2023
North America
In Q3 2023, the Methylene Dichloride prices witnessed a bearish price trend for successive months amid lackluster purchases and high production rates among the enterprises, resulting in product stockpiles. With slow feedstock Methanol pricing and weak product demand in the region, the Methylene Dichloride price in the vicinity concluded the quarter on a sluggish note. While demand remained unresponsive to recent talks about stabilization and doubts about prices continued, rising export offers prompted sellers to be cautiously optimistic. In terms of product supply, suppliers remain skeptical about increasing the prices for the domestic and overseas markets. Lethargic demand has been the main reason behind the lower trading falls amid the recession fear in the region. Adding to the scene was ample supply triggered by the arrival of previously purchased cargo. Given the continuous demand slump, regional producers have no option but to reduce MDC plant operating rates to reduce production losses. In Sept 2023, the price of Methylene Dichloride in the USA declined to USD 840/ton FOB Louisiana.
Asia Pacific
In the Asia Pacific region, the price trend of Methylene Dichloride remains sluggish in Q3 2023 in the wake of adequate inventory level among the significant manufacturing units and sluggish demand outlook from the end-user. The price decrease was also supported by appropriate product accessibility and substantial export proposals from foreign producers. The cost decrease was caused by lackluster purchasing operations, which were exacerbated by the region's reduced demand. MDC exports from China to the rest of Asia are adequate despite decreasing prices for fresh stock. However, towards the end of the quarter, the supply remained inadequate, and the demand from the downstream solvent enterprises surged, which provided cost support to the prices. MDC purchases in China were consolidating at a high level, the price of feedstock liquid chlorine continued, and the cost support for dichloromethane was improved. Domestic output of Methane Chloride was around 76%, while company inventories were medium to low. In China, the Methylene Dichloride price during Sept 2023 surged to USD 426/ton FOB Qingdao.
Europe
This quarter, the price of Methylene Dichloride in Europe witnessed a bearish market trend when compared with the previous quarter. Europe continues to add pressure with aggressive pricing as companies fight for whatever demand is available. Meanwhile, policies are not addressing the growing competitiveness and de-industrialization taking place. The demand fundamentals of Methylene Dichloride in Germany declined with the limited trades and sluggish trade volumes among the significant production units. Exports of Methylene Dichloride from Germany to India, Turkey, and other European regions remain moderate, and the trades were mainly on a need-to basis. Some suppliers nearly halved their overall capacity via lower rates at several plants to accomplish supply management at a time when demand considerably shrank. Still, their margins are under pressure. During Sept 2023, the price of Methylene Dichloride in Germany declined to USD 710/ton FOB Hamburg. The limited downstream solvent in Aerosol fundamentals and lackluster market fundamentals hampered the fresh purchasing appetite. Instead of paving the way for a reversal in Europe's spot markets due to poor supply-demand dynamics, the downward momentum affected the price trend.
For the Quarter Ending June 2023
North America
In Q2 2023, the purchasing activities for Methylene Dichloride plunged in the wake of limited trades and an increase in the inventory level. When compared with the previous quarter, the market fundamentals declined amid limited trade in the overseas market. In June 2023, the price of Methylene Dichloride in the US declined to USD 865/ton FOB Louisiana. Weak market exchange rates and sluggish demand for Methylene Dichloride continue to be the key contributors to the product's cost predictability in the domestic market. Suppliers obtained the cargoes from the downstream businesses in accordance with the requirements. The regional MDC market was observed to be affected by the slow market offtakes and low purchasing activity as a declining downstream enterprises demand. With suppressed demand, major US producers offer discounts on bulk purchases. The demand for MDC from the solvent industry remains at the lower end with adequate inventories. The end-user industry worked on their plant cautiously according to the prerequisite from the buyers.'
Asia Pacific
This quarter remains affected by abundant Methylene Dichloride availability and low market fundamentals among the significant producing units. In May 2023, the price of Methylene Dichloride in China declined to USD 380/ton FOB Qingdao. Ineffective use of stockpiles and scant feedstock Methanol prices continue to fall in comparison to those in the regional marketplace. Methylene Dichloride exports from China to the Asian market are still constrained. Nevertheless, they provide negotiable prices for premium cargo. The cost dynamics decreased due to product bearish trading and sluggish Methylene Dichloride demand from the downstream solvent and adhesive business. The upstream Methanol market's fundamentals deteriorated due to weaker bids and offers from providers. Weak purchasing trading activities and adequate supplies to meet the buyer's need continued to influence the downstream solvent and adhesive market's demand for Methylene Dichloride. However, in the Asian market, prices showed a bearish trend with weak spot conversations, and retailers were buying restricted quantities at lower prices.
Europe
Recession fear and economic uncertainty in Europe had affected the market fundamentals along with weak purchasing appetite. In June 2023, the price of Methylene Dichloride in Germany declined to USD 723/ton FOB Hamburg. Due to lackluster demand and high product inventory levels in the European region, the Methylene Dichloride market tumbled. Supported by the deteriorating feedstock Methanol market, the production cost of MDC also declined, and manufacturers revised their offers on the lower end to clear their existing stocks. Rising supply and feeble demand keep the Methylene Dichloride market under pressure with the weak offering from the downstream enterprises. MDC prices in Germany remain flat as major manufacturing units operate their plant at higher levels with a deterred downstream solvent procurement market. The spread between feedstock Methanol and final product MDC further shrinks, narrowing the profit margin and revenue among the significant producing units. Given the persistent weakness of demand, many producers in Germany report that they continue to run their factories at reduced capacity to avoid further stockpiles.
For the Quarter Ending March 2023
North America
In Q1 2023, the Methylene Dichloride market showcases a strong market fundamental along with high purchasing activities. With increasing feedstock Methanol prices, major MDC producers also elevated the cost to maintain their profit margins and revenue. With increasing feedstock Methanol prices, major MDC producers also elevated the cost with the increase in the production cost of Methylene Dichloride. In Feb 2023, the price of Methylene Dichloride in the US surged to USD 571/ton Ex-Louisiana. Towards the end of the quarter, the MDC market fell following weak product demand and adequate accessibility. Given the persistent weakness sought, numerous producers reduced their working rate to abstain from stockpiling.
Asia Pacific
In Q1 2023, the MDC market remains lackluster, with limited demand and high inventories when compared with the previous quarter. The decline in the feedstock Methanol market with weak benchmark futures further supported the feeble price trend for the Methylene Dichloride market. The demand for MDC from the downstream refrigerant R32 adjusted lower due to tepid product supply and bearish market sentiments. The spot prices of MDC declined with slow market offtakes in the regional market. Exports of MDC from China to the Asian market slumped amid healthy supplies among the inventory units. In March 2023, the price of Methylene Dichloride in China declined to USD 441/ton FOB Qingdao.
Europe
There was a low demand for Methylene Dichloride this quarter, which resulted in a lower price for the product. Deteriorating market fundamentals and lower bidding of product prices in the region declined the market futures as well. In Jan 2023, the price of Methylene Dichloride in Germany was USD 760/ton FOB Hamburg. Exports of MDC from Germany to the European and Asian markets tumbled amid limited interest of suppliers for bulk purchases. Towards the end of the quarter, the price of MDC gained a stance with the uptick in trading activities and continuous utilization of product inventories. The demand came from resellers and suppliers, and purchasing orders began to flow into the product from downstream solvent industries.
For the Quarter Ending December 2022
North America
This quarter, the Methylene Dichloride market in the US showcased a downward price trajectory due to sufficient product availability and limited trading activities. During Dec, the price of Methylene Dichloride in the US declined to USD 880/ton FOB Louisiana. The product's inventories in North America were high, affecting the profit margins among significant manufacturing units. Downstream enterprises operated moderately with low purchasing from the end user. The feeble feedstock Methanol market and muted demand remain the major factors for such a price trend. A slump in market essentials and lower offering of MDC costs in the region declined the market futures.
Asia Pacific
In Q4 2022, the MDC price remains stable on the higher end due to tepid market fundamentals and moderate demand from the end-user industries. In Nov, the price of MDC in China was USD 494/ton FOB Qingdao. However, the price trend faced a Southward trajectory in Dec with limited product bidding and declining market fundamentals. This quarter, weak market sentiments and sufficient product availability resulted in low supplier purchasing esteem. With high inventories among the ports, major manufacturing units have cut their production rate and are more focused on clearing their existing stocks. The solvent industry was largely repressed by falling demand and low purchasing appetite. The end-user industry worked their plant cautiously according to the prerequisite from the buyers.
Europe
In Q4 2022, bearish market dynamics and limited product demand from the downstream enterprises resulted in a weak price trend. The prices declined this quarter for consecutive months along with limited bidding from the traders. In Dec, the price of MDC in Germany slipped to USD 776/ton FOB Hamburg. The downstream Preservative industry was largely repressed by falling interest and low purchasing appetite. End-users worked their plants cautiously in accordance with buyers' requirements. The demand for MDC in the regional market was likewise detailed feeble with breaking down interest and adequate stock. In addition to recession fears and uncertainty in the economy, declining prices are also a result of a weakening economy.
For the Quarter Ending September 2022
North America
At the end of this quarter, the price of Methylene Dichloride (MDC) showed a downtrend compared with the previous quarter. The cost of Methylene Dichloride declined in the wake of frail demand and adequate product availability. The slump in market essentials and lower offering of MDC costs in the locale lowered the market futures. In Sept, the price of Methylene Dichloride (MDC) slipped to USD 709/ton FOB Louisiana. Fundamentals of the downstream derivative market of MDC in the USA remained weak. Trading market sentiments slumped with declining demand from solvent industry production cut among the plant.
Asia Pacific
In the Asia Pacific region, the price of Methylene Dichloride faced a south trend with a bearish price trend and sufficient product inventories. Due to weak market sentiments and high port inventory levels, the MDC producers sold the product at a lower price to clear their existing stocks. With revised prices for overseas suppliers, China's exports to Asia declined as well. The availability of vessels and shipment delays at the ports cooled logistics costs. In Sept, the price of Methylene Dichloride (MDC) dropped to USD 489/ton FOB Qingdao. The solvent industry was largely repressed by falling demand and low purchasing appetite. The end-user industry worked their plant cautiously according to the prerequisite from the buyers.
Europe
This quarter, the price of Methylene Dichloride declined due to weak demand for the product and sufficient product availability. In Germany, the cost of Methylene Dichloride (MDC) during Sept fell to USD 820/ton FOB Hamburg. Regarding supply, an adequate supply of cargo and a lower buying appetite dragged the prices of MDC in the region. Import prices into India have fallen more significantly than in other Asian regions. The availability of vessels and shipment delays at the ports cooled logistics costs. With European spot prices declination, the production cost among the significant manufacturing units slumped, affecting the price trend.
For the Quarter Ending June 2022
North America
During this quarter, the price of Methylene Dichloride remained on the upper end compared to the previous quarter in the US. Due to Russia's invasion of Ukraine, manufacturing and constraints supply had suspended, which increased the cost of Methylene Dichloride in the American market. In late April, the US market encountered a stock deficiency of feedstock Methanol because of different production rate diminishes. Because of low material accessibility, producers had to revise their offers. Besides, the request from downstream paint and coating enterprises stayed robust in the homegrown market, adding to cost increments. In June, the price of Methylene Dichloride in the US was USD 885/ton FOB Louisiana.
Asia Pacific
Methylene Dichloride prices gained momentum compared with the previous quarter due to improved purchasing rates and tepid market sentiments. In Q2 2022, the prices are still on the lower end with the utilization of existing inventories and stably operating manufacturing units. In June, the cost of Methylene Dichloride in India was USD 760/ton Ex- Depot Delhi NCR. Prices remained under pressure from oversupplies, as booming new MDC capacities in India affected the exports of China. MDC prices slumped with weak demand from downstream paint and coating industries. With two months of lockdown in major cities of China, domestic consumption of MDC reduced, resulting in a greater extent of exporting cargoes to overseas markets.
Europe
European Methylene Dichloride market stayed on the higher side with an increment in demand each month in Q2 2022 compared to previous quarters. Demand remained robust; however, the supply was insufficient, influencing the market fundamentals. Major MDC producers had introduced a surcharge on their products despite spiraling gas and power cost. Feedstock Methanol and Chlorine confronted the level of snugness makers who had shifted from negotiation on cost and expanded the price because of limited availability and higher production cost. Downstream paint and coating industries had additionally grown, and the market balance stayed firm, despite the ascent in adequate capacities this quarter. In June, the cost of Methylene Dichloride in Germany was USD 995/ton FOB Hamburg.
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.
Asia Pacific
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
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.
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.
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.
