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SunSirs: China DME Price Continues to rise in October
October 22 2020 14:36:26SunSirs(Selena)

With the arrival of the peak season, DME market ushered in an upward trend. According to the data monitoring of SunSirs, the average price of DME in Henan market on October 8 was 2,556.67 RMB/ ton, and that on October 20 was 2,703.33 RMB/ ton, with an increase of 5.74% and 22.32% compared with September 1.

Two thirds of October has passed, and the DME market rose first, consolidated and then rose again. Due to the downstream demand, the overall market atmosphere is good, and in terms of cost, the raw material methanol goes up, which also brings certain favorable support to the market. In October, the weather dropped significantly, and the overall demand for terminals increased. Henan, the main production area, has stable supply, good shipment and low inventory pressure. Supported by multiple favorable conditions, China DME market continued to rise.

Subsequently, DME market entered consolidation state, mainly on the market wait-and-see. International crude oil continued to fall, and the lack of support in the international market brought negative effects to the market. The market continued to rise in the lack of momentum, some fell, but the decline was not large, mainly to horizontal consolidation. In order to protect the market price, some enterprises in Henan Province, such as Xinlianxin, carried out the minimum guarantee policy for two days.

With the end of the minimum guarantee policy of Xinlianxin and other enterprises in Henan Province and the announcement of the settlement price, Xinlianxin has been reduced from 2,650 RMB/ ton on October 12 to 2,610 RMB/ ton on October 15. Although the price has declined, the range is small. From October 18 to 20, Xinlianxin raised 20 RMB/ ton for three consecutive days. On October 18, it rose to the price before falling, and on October 20, the ex-factory price rose to 2,690 RMB/ ton. Henan, the main production area, rose overall, the production and sales of enterprises were balanced, and the inventory was mostly in a controllable state.

After the National Day holiday, the domestic methanol market rose, and some manufacturers increased the ex-factory quotation again, with the range of 30-50 RMB/ ton. According to the monitoring data of SunSirs, the average price of methanol producers in Shandong on October 12 was 1,825RMB/ ton, and the average price of methanol production in Shandong on October 16 was 1,930 RMB/ ton, an increase of 5.75% during the week and a 6.78% month-on-month increase in prices, down 17.17% year-on-year. Methanol market quotations in various regions also rose to varying degrees, among which Shandong and Shanxi have seen significant increases. After the National Day, the methanol market was affected by favorable factors such as overhaul of overseas installations and continued port depots, and the market price rose slightly. At present, most traders ship rallies, and SunSirs methanol analysts expect the short-term domestic methanol market to fluctuate at a high level.

At present, the methanol market has been adjusted in a narrow range, and the domestic gas market has fallen down after rising, which has limited support for the DME market. In the international market, crude oil closed down slightly and brought some negative effects. However, the overall transaction atmosphere of DME Market is relatively general, downstream inventory is appropriate to enter the market replenishment operation, most manufacturers have balanced production and sales, and inventory is controllable. The mentality is mostly firm. And the current peak season factors still exist, and China DME market is difficult to rise in the near future.

 

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