“Big drop” in DME Market

Price trend:


In recent January, the domestic market of dimethyl ether fell continuously, with a large range. On October 15, the average price of the domestic market of dimethyl ether was 3550 yuan / ton, and on November 15, the average price was 3066.67 yuan / ton, with a decline of 13.61% during the period. The price was 34.73% lower than the same period last year.


In September, it entered the traditional sales peak season of DME market, and the market opened the upward channel as expected. The price rose continuously from the beginning of September, with a rise of 23.26% on the 40th day, but “after a big rise, it will be accompanied by a big drop”. The peak season of “golden nine silver ten” has not passed, and the market of dimethyl ether has not been strong. Since October 16, the price has shown a continuous downward trend, and the market of dimethyl ether has experienced a “big drop” like the weather.


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Since the middle of October, with the recovery of production of some plants shut down in the early stage, the market supply has increased, which makes the market with unbalanced supply and demand turn to oversupply, and the competition is gradually fierce. But on the demand side, the terminal demand is limited, the downstream receiving strength is not good, and just needs replenishment. In order to avoid the profit loss caused by the early purchase, most of them hold a wait-and-see attitude. The market transaction atmosphere is low, the inventory in Henan continues to accumulate, and under the double pressure of sales and inventory, the profit is continuously released for shipment, so the price is easy to fall and hard to rise. With the price falling to the current low, the seller is willing to hold the market. At present, although the decline has been slow, the market is lack of obvious positive support.


Comparison of price trend of methanol dimethyl ether liquefied gas on October 14-11-15, 2019:

It can be seen from the figure that in terms of raw materials, methanol market has declined in a weak way in recent January, with the trend of “a large dive”, followed by a small rebound and then a narrow adjustment. The price trend of dimethyl ether and methanol deviated from each other in stages, but the decline was almost the same. The inland and port of methanol declined to varying degrees. The port continued to be weak in the day, the futures market kept prices down, and spot buying maintained rigid demand. On the mainland market, the wait-and-see mentality is obvious. Some enterprises haven’t adjusted their prices yet, and the prices fall down due to poor trading in some regions. It is reported that the port price is low at present, and some goods flow back to Shandong, which to some extent suppresses the trend of the mainland market. In addition, the northwest guidance price has been adjusted this week, so we need to pay attention to the transmission to the mainland market.


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In the aspect of civil gas, the trend of dimethyl ether and liquefied gas is declining as a whole, but the decline of liquefied gas is less than that of dimethyl ether. At present, the price difference of gas and ether in Henan Province is about 700-900 yuan / ton, that in Hebei Province is about 800 yuan / ton, and that in Shandong Province is about 800-900 yuan / ton. The trend of civil gas market in recent January shows a slight rebound after a continuous decline. International crude oil continues to decline. There are frequent arrivals from terminals to ships, and the market supply pressure is large. Although the terminal demand has increased in winter, the terminal demand for propane is greater than that for civil use. And with the arrival of the northern heating season in November, the demand in the north will turn weak. At present, the contradiction between domestic supply and demand has appeared. The main manufacturers in the region are not able to deliver goods continuously, the inventory pressure is increasing, and the market price of liquefied gas is falling one after another.


Future forecast:


Sun Yaolin, a business agency, believes that at present, methanol supply is abundant, traditional downstream demand remains weak, and some downstream starts are low due to environmental protection factors, which further weakens the demand. The short-term domestic methanol market is dominated by differential finishing, with partial or continuous decline. The liquefied gas market is dominated by narrow volatility, and the relatively sufficient supply restricts the price rise. The market of cost methanol and liquefied gas is weak, and the good is limited, so it is difficult to drive the rise of DME. In recent years, Henan xinlianxin has repeatedly implemented the minimum guarantee policy to protect the market price, but the transaction atmosphere has not improved significantly. The market price has been continuously reduced. Some enterprises have been on the edge of profit and loss. In addition, the environmental protection inspection in Henan has been strengthened, which affects the market mentality. Multiple negative factors are intertwined, and the DME market is expected to continue to be weak in the short term.


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