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SurSirs: Raw Materials Rise, Dimethyl Ether (DME) Market Stops Falling and Rebounds

September 11 2019 14:44:29     SunSirs (Selena)
  1. Price Trend

This week, the domestic dimethyl ether market rose broadly due to the impact of rising raw material prices. At the beginning of the week, the average domestic market price of dimethyl ether (Henan) was 2,880 RMB/ton, and the weekend average price was 3,040 RMB/ton. Within the week, the price increased 5.56%, which was 35.11% lower than that of the same period last year.

  1. Market Analysis

Product: Dimethyl ether (Henan) market rose sharply this week. In the early period, the domestic supply was in excess. In addition, August was the off-season of market demand, and downstream consumption was slow. Cost methanol and liquefied petroleum gas market trend is weak, bearish market mentality, the downstream market entry is cautious and wait-and-see, with prices continually bottoming out.

After entering September, the off-season is over. Influenced by the gas market, the traditional sales peak season begins, and the market demand will improve, but there is no obvious improvement at present. The main reason for this rebound is the strong rise of raw material methanol, the rise in cost has seriously reduced the profits of dimethyl ether enterprises, some enterprises have been in a loss state, so there has been a stop-drop rebound.

This week, Henan Xinlianxin end Bottom Guarantee, Wednesday began to lead the rally, tentative upward, the market response was still acceptable, manufacturers shipment situation improved and continued to rise, followed by small factories around. Influenced by the rising cost of methanol, the dimethyl ether Market is strong, with a rise of 5.56% in the week.

Industrial chain:

Methanol: This week, the domestic methanol market is on the strong side, driven by the rise in futures prices, the trading in the mainland is good, and prices are rising along with the trend. Price in major production areas increased 90-130 RMB/ton this week, followed by North China and Shandong. Port prices have been volatile, with the port rising 100 RMB/ton this week. The total inventory of ports in eastern and southern China was 23.613 million tons, an increase of 93.7 million tons over the same period last week, which maintained an increasing trend. Note: Sample inventory data in Nanjing area have been increased since August. In methanol to olefins, Ningbo Fude and Inner Mongolia Jiutai MTO uints have resumed normal production.

Liquefied Petroleum Gas(LPG): This week, the domestic LPG (Shandong) market was narrowly adjusted and the fluctuation was not obvious. At the beginning of the week, crude oil fell for two consecutive days, affecting the market mentality. In addition, the downstream consumption rate increased slowly. The inventory of manufacturers was mostly above the middle level. Shandong market made small concessions, mainly for shipments. Thursday's surge in international crude oil boosted the LPG market, but it was not obvious. Manufacturers stopped falling and maintained stability, guaranteed priority for shipments, and the trading atmosphere in the market was tepid in the week. September is the traditional sales season, spot market trend with signs of recovery, but the downstream consumption rate is not as fast as expected.

  1. Market Forecast

SunSirs’ Dimethyl ether analysts believe that: on the cost: methanol market is expected to show a regional market next week, the trend will be reflected in the stable rise and fall; LPG market downstream consumption rate is slow, expected to rise steadily next week. On the demand: Dimethyl ether Market actual demand is still weak, next week Hebei Jichun and Qinyang Shengxin resumed production, supply increased, market negative. However, due to the impact of the traditional gas market sales peak season, there is still some support for the market. It is expected that the future market may rise narrowly.

 

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