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Home > DME News > News Detail
DME News
SunSirs: DME Repeatedly Broke New Lows In the first half of 2020
June 10 2020 07:53:09SunSirs(Selena)

In the second half of 2020, looking back on the first half of 2020, the market of DME was relatively low, and the overall trend was fluctuating, especially after the Spring Festival, it never returned on the way down. On January 1, 2020, the average market price of DME in Henan Province was 3,116.67 RMBB/ ton, and on June 7, 2,243.33 RMB/ ton, down 28.02% during the period, with an earthquake amplitude of 32.83%.

The market price of DME breaks the new low in 8 years

According to the data monitoring of SunSirs, by June 7, 2020, the price of DME had broken the new low level in the past eight years. On June 7, 2012, the average market price of DME was 4,231.25 RMB/ ton, and on June 7, 2020, the average market price was 2243.33 RMB/ ton, with a decline of 46.98% during the period and earthquake amplitude of 55.98%. Since October 2018, DME has been greatly affected by the policy, and the market price has declined broadly.

The market trend in the first half of 2020 can be divided into four stages

Overall, in the first half of 2020, the market of DME can be divided into four stages: the first stage was from January 1 to February 3, during the period from New Year's day to the Spring Festival, the trend of DME showed a fluctuating upward trend; the second stage was from February 3 to March 31, after the Spring Festival, the market continued to be depressed, and the trend showed a continuous downward trend; the third stage iwass from April 1 to April 19, affected by the products of the industrial chain, DME ushered in the market; the fourth stage was from April 19 to June 8, after the DME market returned to rationality, it went down again.

The short-term "success" in 2020

After New Year's Day and before the Spring Festival, the trend of DME overall showed an upward trend of shock, continuing the upward trend at the end of 2019. Before the Spring Festival, the international crude oil continued to push up, supporting the domestic gas price to go higher. In addition, the Saudi Aramco CP price rose sharply in January, which promoted the continuous rise of civil gas. DME was boosted by this good news, and the price kept rising. Subsequently, civil gas fell, but DME did not follow the decline, but continued to rise. Before the Spring festival, manufacturers stopped one after another, so that the original low operating rate of DME continued to decline, and the market supply was limited, which brought good support to the market. The manufacturer's shipment was smooth, the stock was free of pressure, the price was firm and up until the Spring Festival.

Large reduction of terminal demand, DME "rising trend no longer"

After the Spring Festival, the trend of DME showed a continuous downward trend. Influenced by COVID-19, the terminal demand was greatly reduced, the transaction atmosphere was light, and the market was in a situation of supply exceeding demand. At the end of February, the international crude oil plunged sharply, and the civil gas market once again fell into a deadlock due to this impact, with the overall downward trend as the main trend. The price difference between gas and ether gradually narrowed, and the market for DME was in a downturn. In March, with the development of COVID-19, the terminal demand increased compared with the previous period, and the DME manufacturers basically entered the comprehensive production state. However, the international crude oil continued to decline, mainly falling, which depressed the decline of the civil gas market. The price of gas and ether basically had no difference, and the cost of methanol also fell broadly affected by this. The DME market suffered multiple negative, mainly falling.

Propylene skyrocketed and DME "followed the trend"

At this stage, DME ushered in the "irrational" upward market. On April 12-14, the wide upward trend of polypropylene led to the sharp rise of propylene. As the upstream of propylene, the price of propane also rose sharply during the period, while the price of LPG continued to rise driven by the sharp rise of propane, and the price difference between gas and ether gradually opened, which once again brought benefits to the DME market. Henan Xinlianxin raised the ex-factory price for 4 consecutive days, and DME took advantage of the rising trend.

Market "return to rationality" price drops sharply

Due to the lack of substantial positive results in the third stage of the rise, the civil market of LPG fell sharply, with DME mainly falling, the market ushered in a rational correction, and the price fell sharply. Due to the influence of seasonal factors, the weather was gradually warming and the terminal demand was decreasing. DME was about to enter the "traditional off-season", and the price was easy to fall but hard to rise. As of the end of May, the start-up of DME in China was about 13%, down from last month, and the market start-up was at a low level.

As we all know, DME can be mixed in LPG as fuel, so the civil trend of LPG has a deep impact on the market of DME. As the raw material of DME, the trend of methanol in the first half of 2020 was almost the same as that of DME. After the Spring Festival, it was difficult to rise and mainly falls.

In the second half of the year, DME may fall first and then rise due to seasonal factors

According to relevant policies, DME can only be used alone, not mixed with LPG. However, it is understood that the main application of DME Market is mixed with LPG, and industrial use only accounts for a few. So in recent years, with the strengthening of national inspection on mixed gas, some small manufacturers have to shut down, and Henan is the main production area and main sales area of DME. Under this policy, it can only be consumpted in the province, which makes the survival of DME difficult and the overall level is low. But in the later stage, the mixed market is still not optimistic. In the short term, the trend of DME is greatly affected by crude oil and liquefied gas. In the second half of the year, the trend of DME may be strongly affected by seasonal factors, and the overall trend may fall first and then rise.

 

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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