Dichloromethane (also known as methylene chloride) has emerged as a standout performer in China’s chemical export landscape, with 2025 marking a historic milestone—export volume surged to 213,000 tons, a year-on-year jump of 40.9%. This robust growth comes on the heels of a 26.2% decline in 2024, driven by shifting global capacity dynamics, price competitiveness, and evolving demand patterns across emerging markets. As a versatile solvent critical to refrigerants, pharmaceutical intermediates, cleaning agents, and coatings, dichloromethane’s export trajectory reflects broader trends in global chemical trade, industrial capacity shifts, and regulatory impacts. This blog dissects the key drivers behind China’s 2025 export boom, analyzes regional demand dynamics, and forecasts the 2026 outlook for this essential chemical.
2021–2025 Export Trajectory: Volatility Driven by Supply-Demand and Global Competition
China’s dichloromethane exports have followed a fluctuating upward trend over the past five years, shaped by domestic oversupply, international capacity expansion, and price dynamics:
Core Trend Overview
• Export Dependence: Export dependence has hovered between 11%–15%, remaining relatively low overall. However, domestic supply has grown faster than consumption, widening the supply-demand gap and pushing manufacturers to prioritize exports as a key absorption channel.
• 2024 Downturn: International capacity expansion—particularly in South Asia, Southeast Asia, and the Middle East—squeezed China’s market share. Export volume dropped to 151,000 tons, with declines in key markets like the United Arab Emirates (UAE), South Korea, and Turkey.
• 2025 Rebound: Accelerated domestic capacity release and sustained price competitiveness (fueled by intense domestic market competition) drove exports to a record high. Overseas demand recovery, especially in emerging markets, further amplified growth.
Monthly Seasonal Fluctuations in 2025
2025 exports saw notable troughs in January, June, and August, driven by dual supply-demand pressures:
• Supply Side: Concentrated maintenance periods for domestic production enterprises, including shutdowns of major export facilities, temporarily tightened exportable supply.
• Price Factors: Periods of higher domestic dichloromethane prices eroded export competitiveness, dampening enterprise enthusiasm for overseas sales.
• Demand Side: European market traditional off-seasons and phased inventory saturation in importing countries (e.g., Vietnam’s slowed purchases post-concentrated replenishment) weakened overseas demand.
2025 Export Structure: Emerging Markets Take Center Stage
China’s dichloromethane export destinations underwent significant reshuffling in 2025, with emerging markets displacing traditional buyers as core growth engines:
Top Export Destinations (2025)
The top five trading partners—Turkey, Vietnam, Brazil, the UAE, and Nigeria—accounted for 43% of total exports (213,000 tons). Key shifts include:
• Turkey: Emerged as a standout market with sharp export growth. Leveraging its customs union with the EU, Turkey has become a regional processing trade hub—importing Chinese dichloromethane to produce coatings, adhesives, and metal cleaners for re-export to Europe. This shift bypasses strict EU REACH regulations on dichloromethane use, driving robust purchasing from China.
• Vietnam & Brazil: Manufacturing growth in Vietnam and structural local supply gaps in Brazil boosted import demand, solidifying their positions as top-three destinations.
• Decline of Traditional Markets: Exports to India plummeted due to India’s expanded methane chlorides production capacity, reducing import reliance. The UAE—once a top destination (15% of exports in 2024)—saw sharp declines in 2025, reflecting diversified sourcing strategies and China’s shift to emerging markets.
Export Registration Concentration
Chinese dichloromethane exports are geographically concentrated in major chemical production bases with convenient port access:
• Key registration locations include Shandong Province, Zhejiang Province, Guangxi, and Shanghai—home to China’s leading methane chlorides producers and strategic logistics hubs.
Key Drivers & Challenges Shaping Exports
Growth Drivers
1. Price Competitiveness: Intense domestic competition pushed dichloromethane prices to historic lows, enhancing China’s edge in global markets.
2. Domestic Capacity Advantages: Large-scale, integrated production facilities deliver cost and quality benefits, strengthening competitiveness against regional rivals.
3. Emerging Market Demand: Manufacturing expansion in Turkey, Vietnam, and Brazil, paired with local supply shortages, created sustained import needs.
4. Overseas Demand Recovery: Core application sectors (refrigerants, pharmaceutical intermediates, cleaning agents) saw renewed growth in global markets.
Persistent Challenges
1. International Capacity Competition: New capacity in South Asia, Southeast Asia, and the Middle East continues to encroach on China’s share in traditional markets.
2. Regulatory Risks: Stringent environmental policies—such as the U.S. listing dichloromethane as a potential carcinogen and EU REACH restrictions—limit market access in developed economies.
3. Seasonal Demand Volatility: Traditional off-seasons in Europe and phased inventory cycles in importing countries create periodic export headwinds.
2026 Outlook: Export Growth Expected to Continue
Building on 2025’s momentum, China’s dichloromethane exports are projected to grow further in 2026, with an estimated volume of around 230,000 tons. Key supporting factors include:
• Sustained Domestic Oversupply: The gap between domestic supply and consumption is expected to persist, keeping exports as a critical absorption channel for manufacturers.
• Emerging Market Expansion: Turkey’s role as a European processing hub will deepen, while Vietnam and Brazil’s manufacturing sectors continue to drive demand growth.
• Cost & Quality Competitiveness: China’s integrated production capacity and stable product quality (meeting international standards) will maintain its edge over regional competitors.
Strategic Recommendations for Stakeholders
For Exporters & Manufacturers
• Prioritize Emerging Markets: Double down on Turkey, Vietnam, and Brazil—invest in local partnerships to navigate trade logistics and regulatory requirements.
• Leverage Price Flexibility: Use cost advantages to compete in price-sensitive markets, while exploring value-added services (e.g., technical support) to differentiate from regional capacity.
• Monitor Regulatory Trends: Stay updated on EU REACH, U.S. environmental policies, and emerging market regulations to mitigate compliance risks.
• Partner with Trusted Suppliers: Collaborate with established exporters like Achilles Chemical to access global distribution networks and ensure consistent supply.
For Importers & Downstream Buyers
• Diversify Sourcing: Balance purchases from China with regional suppliers to mitigate supply chain risks from capacity shutdowns or regulatory changes.
• Lock in Long-Term Contracts: Secure stable pricing amid seasonal volatility by signing long-term supply agreements with reliable Chinese manufacturers.
Conclusion: A Market Reshaped by Growth and Adaptation
China’s dichloromethane exports have navigated volatility to reach historic highs in 2025, driven by price competitiveness, emerging market demand, and domestic capacity advantages. The shift from traditional to emerging markets—particularly Turkey’s rise as a processing hub—highlights the industry’s adaptability to global regulatory and industrial trends. While international capacity competition and regulatory risks persist, the 2026 outlook remains positive, with exports set to grow further.
For stakeholders across the value chain, success will depend on recognizing the importance of emerging markets, leveraging cost and quality advantages, and staying agile in the face of regulatory and competitive changes. As China’s dichloromethane export story evolves, it underscores the broader trend of global chemical trade shifting toward high-growth regions and adaptive supply chain strategies.
