Manufacturers Push MDC Price Hike, But Market Struggles with Low Demand

Key Takeaways

• MDC Prices Increase: Domestic manufacturers raised MDC prices to ₹32/kg, while dealers are offering lower rates at ₹27.50–28.50/kg in different regions.
• Demand Remains Weak: API sector consumption is down, affecting overall MDC demand, while bulk drug manufacturers operate at reduced capacity.
• Methanol Prices Drop: The sharp ₹8/kg decline in methanol prices has eased production costs but hasn’t yet translated into lower MDC prices.
• Supply Surplus Grows: Increased production from TGV SRAAC and new player Sreyas has led to higher inventory levels on the East Coast.
• Market Volatility Expected: Price coordination among manufacturers may provide short-term stability, but weak demand could drive further fluctuations.

Chemicals Price: MDC Up, Methanol Down

• Domestic manufacturers have raised methylene dichloride (MDC) prices by ₹2/kg this week, with offers now at ₹32++ per kg, Ex-Plant, on advance payment terms.
• However, authorized dealers are offering MDC tanker load prices lower than manufacturers, at ₹28.00–28.50++ per kg, Ex-Gujarat, on 60-day payment terms.
• In the southern region, authorized dealers of TGV SRAAC are quoting even lower prices, at ₹27.50–28.00++ per kg, Ex-Kurnool, for bulk deals on 60-day payment terms.
• Bulk contracts remain on hold as methanol feedstock prices have plummeted by nearly ₹8/kg compared to last week.
• During January and February, bulk contracts were settled in the range of ₹23–24++ per kg, Ex-Plant, with 90-day payment terms. However, in the current market conditions, manufacturers are unwilling to sell below ₹28.00/kg, according to a market participant.
• A trader attributed the surge in MDC prices to price coordination among manufacturers, but demand remains weak, particularly from the active pharmaceutical ingredient (API) sector. With ARV drug production significantly reduced, MDC consumption on the East Coast has declined
• Additionally, increased production capacity from TGV SRAAC and the entry of Sreyas have contributed to surplus inventories on the East Coast.

Chemicals Supply & Demand: Weak Demand Amid Growing Inventory

• MDC supply remains ample as domestic manufacturers face intense competition amid weak demand.
• The sharp decline in methanol prices has provided some relief to MDC producers.
• India’s monthly domestic MDC consumption is estimated at approximately 30,000 metric tons, with key end users including bulk drug manufacturers, paint producers, metalworking industries, and polyurethane foam manufacturers. 
• While demand was initially expected to grow at a steady pace, the sharp decline in ARV drug production has impacted MDC consumption since February 2025.
• Most bulk drug manufacturers are operating at reduced rates due to weak downstream demand and the financial year-end, as many manufacturers aim to minimize feedstock inventories.
• The current production capacities of key domestic manufacturers are as follows:
  1. Grasim: 100 MT/day
  2. GACL: 250 MT/day
  3. GFL: 150 MT/day
  4. TGV SRAAC: 250 MT/day
  5. Sanmar: 50 MT/day
  6. Meghmani: 80 MT/day
  7. SRF: 350 MT/day
  8. Sreyas: 160 MT/day

Chemicals Market News 

• In the global energy market, WTI crude oil prices have declined by 0.41% to $66.62 per barrel. Meanwhile, natural gas prices have risen by 1.08%, now trading at $4.09 per MMBtu.
• The proposed U.S. port fees on Chinese-built and Chinese-operated ships could severely impact U.S. chemical exports, with China benefiting the most, according to speakers at S&P Global’s World Petrochemical Conference (WPC) in Houston. 
• Udo Lange, CEO of Stolt-Nielsen, highlighted that these fees could skyrocket costs—small vessel fees could rise from $20,000 to $500,000, while large vessel fees could increase from $40,000 to as much as $3 million. These higher costs could lead to a significant decline in U.S. exports.

Expert Insights: Volatility Expected 

MDC prices are expected to show mixed trends in the near term as the market adjusts to prevailing supply conditions. While coordination among manufacturers may support price stability, weak demand could undermine any price-fixing efforts.