In the second half of 2020, looking back on the first half of 2020, the market of DME is relatively low, and the overall trend is fluctuating and falling, especially after the Spring Festival, it is on the way down “never to return”. On January 1, 2020, the average market price of dimethyl ether in Henan Province was 3116.67 yuan / ton, and on June 7, 2243.33 yuan / ton, down 28.02% during the period, with an earthquake amplitude of 32.83%.
The market price of dimethyl ether breaks the new low in 8 years
According to the data monitoring of the business agency, by June 7, 2020, the price of dimethyl ether had broken the new low level in the past eight years. On June 7, 2012, the average market price of dimethyl ether was 4231.25 yuan / ton, and on June 7, 2020, the average market price was 2243.33 yuan / ton, with a decline of 46.98% during the period and an earthquake amplitude of 55.98%. As can be seen from the above figure, 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
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Overall, in the first half of 2020, the market of DME can be divided into four stages: the first stage is from January 1 to February 3, during the period from New Year’s day to the Spring Festival, the trend of DME shows a fluctuating upward trend; the second stage is from February 3 to March 31, after the Spring Festival, the market continues to be depressed, and the trend shows a continuous downward trend; the third stage is from April 1 to April 19, affected by the products of the industrial chain, DME ushers in the market The fourth stage is from April 19 to June 8. After the DME market returns to rationality, it goes down again.
The short-term “success” in 2020
After new year’s day and before the Spring Festival, the trend of dimethyl ether is in an upward trend. Continuing the upward trend at the end of 2019, dimethyl ether ushered in a “good start” in 2020. 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. Dimethyl ether was boosted by the second best, and its price kept rising. Subsequently, civil gas fell, but dimethyl ether did not follow the decline, but continued to rise. Before the festival, manufacturers stopped one after another, so that the original low operating rate of dimethyl ether continued to decline, and the market supply was limited, which brought good support to the market. The manufacturer’s shipment is smooth, the stock is free of pressure, the price is firm and up until the Spring Festival.
Large reduction of terminal demand, DME “rising trend no longer”
After the Spring Festival, the trend of dimethyl ether showed a continuous downward trend. Affected by the social and public health events, the Spring Festival holiday is extended, the transportation of all cities is closed, the downstream is in a state of overall shutdown, and the terminal demand is greatly reduced. Although the operating rate of DME is at a low level at this time, the transaction atmosphere is light, and the market is still in a situation where supply exceeds 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 has gradually narrowed, and the market of dimethyl ether has “made matters worse”, once again under pressure. In March, with the development of social public health events, downstream enterprises have recovered, terminal demand has increased compared with the previous period, and DME manufacturers have basically entered the comprehensive production state. However, the international crude oil continues to decline, mainly falling, which depresses the decline of civil gas market. The price of gas and ether is basically the same, and the cost of methanol is also affected by this. The DME market has multiple negative effects, which is difficult to twist Turn the situation, mainly falling, some enterprises were forced to reduce production load.
Propylene skyrocketed and DME “followed the trend”
At this stage, DME ushered in the “irrational” upward market. At the beginning of April, the international crude oil soared, driving the cost of methanol and liquefied gas up for civil use. Affected by the Qingming holiday, the downstream storage and replenishment operation was more active in the market, the manufacturer’s shipment was more smooth, the inventory was released, and the price rose, but the increase was limited. The main reason for the sharp upward trend at this stage is that on April 12-14, the wide upward trend of polypropylene led to the sharp rise of propylene. Propane, as the upstream of propylene, also led to a sharp rise in the price during the period, while liquefied gas, driven by the sharp rise of propane, pushed up continuously, and the price difference between gas and ether gradually opened, which once again brought benefits to the market of dimethyl ether. Henan xinlianxin raised the factory price for four consecutive days, and dimethyl ether took advantage of the rising trend.
Market “return to rationality” price drops sharply
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Due to the lack of substantial positive results in the third stage of the rise, the civil market of liquefied gas fell sharply, with dimethyl ether mainly falling, the market ushered in a rational correction, and the price fell sharply. With the completion of a new round of replenishment in the downstream, many of them have left the market to wait and see, with a more cautious attitude. In addition, during this period, the cost of methanol continuously bottomed out, and the supply and demand of civil gas market is unbalanced, mainly falling. Affected by seasonal factors, the weather is gradually warming, the terminal demand is reduced, and the replenishment cycle in the downstream is lengthened. DME is about to enter the “traditional off-season”, and the price is easy to fall and hard to rise. As of the end of May, the start-up of dimethyl ether in China was about 13%, down from last month, and the market start-up was at a low level.
As we all know, dimethyl ether can be mixed in liquefied gas as fuel, so the civil trend of liquefied gas has a deep impact on the market of dimethyl ether. As the raw material of dimethyl ether, the trend of methanol in the first half of 2020 is almost the same as that of dimethyl ether. After the Spring Festival, it is 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, dimethyl ether can only be used alone, not mixed with liquefied gas. However, it is understood that the main application of dimethyl ether Market is mixed with liquefied gas, 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 dimethyl ether. This policy However, it can only be digested 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 dimethyl ether is greatly affected by crude oil and liquefied gas. In the second half of the year, the trend of dimethyl ether may be strongly affected by seasonal factors, and the overall trend may fall first and then rise.
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