SunSirs: Dimethyl Ether (DME) Market Soared

1. Price Trend

The domestic market of dimethyl ether (DME) continued to rise. On September 4, the average price of the domestic market of DME was 2,880 RMB/ ton, and on October 15, the average price was 3,550 RMB/ ton, with an increase of 23.26% in forty days. The price was 25.09% lower than that of the same period last year.

2. Market Analysis

After entering the peak sales season, the market of DME rose to a relatively high level. Affected by the liquefied petroleum gas (LPG) market, the market demand has improved, but the trend of LPG has not reached the expectation, so the DME Market in the early September is not obvious. After the incident in Saudi Arabia on September 14, the crude oil market soared, and the DME rose continuously. After that, under the influence of the National Day holiday, the demand for replenishment before the holiday increased, and the market atmosphere was good. In addition, some manufacturers stopped production before the holiday, the supply in the area was reduced, the relationship between market supply and demand was broken, the shipment of manufacturers continued to be smooth, the inventory of many factories was empty, and the price continued to push up. After the holiday, the cost of methanol increased significantly, and there was still a demand for replenishment in the downstream.DME continued to increase. Henan Xinlianxin increased 300 RMB/ ton for six consecutive days, and the manufacturer reported that the delivery was good. Until October 15, the DME market recovered after rising. In the early stage, some manufacturers started to operate their devices, the market supply increased, and the market returned to rationality.

Industrial chain: The price trend of DME and methanol are basically the same. The overall price of methanol market continues to rise, with a large increase and more frequency. Under the support of cost, the market of DME rises. At present, the methanol inventory in the northwest main production area is low, and the manufacturer has no delivery pressure for the time being, and the price continues to be strong. After the holiday, the downstream market gradually recovered, some downstream enterprises actively replenished, the methanol market in the mainland shipped smoothly, the on-site operators had a positive attitude, and the market trend around Bohai Sea and Huaihai Sea continued to rise. On the port side, the trend of the port is strong, the market trading atmosphere is good, and the expectation of the operator for the later period is fair.

The trend of DME and LPG is rising as a whole, but the rise of LPG is less than that of DME. At present, the price difference between DME and LPG is shrinking. The peak season of LPG market is coming, but due to the slow improvement of terminal demand and limited consumption capacity, it is difficult for the market to improve substantially, and the previous period has been dominated by narrow adjustment. It was not until the international oil price soared and the international spot market rose that the domestic LPG market ushered in a wave of pushups. However, with the fall of international crude oil, the LPG market gradually returned to the normal price level. After the introduction of CP in October, the price hike was implemented. The industry has sufficient confidence in the future market and is more active in replenishment. After the holidays, the overall performance of the market was good. Sinopec units raised prices substantially, driving local enterprises to actively follow the rise. The overall delivery situation of the national market was good. However, the inventory pressure in Shandong is obvious, taking the lead in delivering profits, and other regions have no intention of falling under the support of main high prices.

3. Market Forecast:

According to the DME analyst of SunSirs, the domestic price of DME has risen to a relatively high level, the downstream receiving capacity is relatively limited, the cost of methanol has dropped after surging high, and the trend of LPG market is weak. Although there are many negative factors at present, the weather will gradually cool down in the later period, and the market demand will increase. It is understood that the manufacturer's inventory pressure is not big at present, and it is still in a controllable state. The DME Market is expected to decline in the short term, but not by a large margin. In the long run, the market may show a trend of falling first and then rising.

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