Declining MDC Prices Amid Weaker Demand and Increased Supply

Key Takeaways

• Price Trends:

1. China: Decreased from 2960 RMB/ton to 2850 RMB/ton within three days.
2. India: Steady at ₹37/kg.

• Market Dynamics:

1. Supply: Increased production and inventory pressure led to slight price reductions.
2. Demand: Weak overall, except for growth in specific sectors like paints, coatings, and pharmaceuticals.

• Industry News:

1. Chandra Asri expands fleet for better raw material supply reliability.
2. Grasim inaugurates a 180 million-liter annual paint facility in India.
3. Nouryon opens an innovation hub in Mumbai for paints, coatings, and agriculture.

• Expert Opinion:

1. The MDC market is expected to remain soft due to weak demand and increased supply, despite higher raw material costs supporting prices.
2. Buyers show a preference for lower prices, adding to downward pressure.

Chemical Price: MDC Price Drops Amid Inventory Pressure

• The Chinese price of high-content Methylene Dichloride (MDC) is reported at 2850RMB/ton on 26th November 2024. This marks a decrease from 2925 RMB/ton on 25th November and 2960 RMB/ton on 24th November.
• In the Indian market, the domestic price of bulk MDC in Kandla is ₹37 per kg. The Indian MDC price has remained stable throughout the entire week.

Supply and Demand Dynamics in MDC Market

• In early November, with high prices, the market had light shipments and inventory was under pressure. Manufacturers considered the negative factors of weak demand and increased supply, and slightly lowered their quotations.
• The MDC market experienced a slight decline this week due to increased supply and weaker demand. On the supply side, equipment operations picked up, leading to a rise in on-site supply and resulting inventory pressure.
• Manufacturers, facing weak demand and increased supply, slightly lowered their prices. On the demand side, the market for refrigerant R32 remained stable, with limited remaining annual quotas and expectations of a significant production reduction in December, which restricted dichloromethane demand. Other applications mostly maintained purchasing on demand, restocking at lower prices. Demand surged in industries such as paints, coatings, adhesives, and pharmaceuticals, fueled by increased industrial activity and seasonal preparations for festive periods.

Chemicals News: Growth in Paints and Coatings Fuels Seasonal Demand

• Chandra Asri Group acquires vessel fleets to improve the reliability of raw material supplies.
• Nouryon establishes an innovation center in Mumbai, India, targeting the paints, coatings, agriculture, and personal care sectors.
• Vietnam's ammonium sulfate imports increased from January to August, with China remaining the largest supplier.
• Grasim Industries inaugurates a paint manufacturing facility in India with an annual capacity of 180 million liters.
• Cracker utilization rates in Japan drop, with ethylene plants averaging 77.4% in October.
• Petrobras and Yara partner to support fertilizer and industrial markets in Brazil.
• Aramco and Rongsheng announce plans for cracker expansions in Jubail to advance liquids-to-chemicals projects.
• Thailand’s ammonia imports are set to decline following the operational halt of PTT Asahi Chemical.
• India’s BPA imports in September decreased, while epoxy resin imports surged by 43.81% year-on-year.
• China’s benzene imports hit a two-year peak, driven by strong inflows from Northeast Asia.
• Mitsui Chemicals unveils recycling technology for high-purity phosphorus recovery.

Expert Opinion on Chemical Market Trends

The market is expected to be weaker in the short term. While the rise in raw material prices, including methanol and liquid chlorine, supports the market, the increased supply puts pressure on inventory levels. There is a strong willingness from buyers to purchase at low prices, which suggests a continued softening of the dichloromethane market in the near future.