DME market trend analysis this week (June 4 - June 8)

Business Club News, June 08 First, price data 1, spot market dimethyl ether prices fluctuated this week, according to the business community mass index (top.100ppi. Com) latest monitoring data: as of June 8th, domestic The average price of ether was reported at 4,231 yuan/ton, which was 2.32% lower than the price of 4,321 yuan/ton on June 4.

Second, long and short dynamic negative factors:

Henan's first chemical dimethyl ether plant output this week.

Reporter unannounced visits to five liquefied gas companies, gas filling inspection 4 mixed with dimethyl ether May 8th, 9th, the reporter unannounced visits to five liquefied gas companies, filled with 5 bottles of liquefied gas as a resident, and sent to Shouguang City product quality supervision and inspection institute inspection. On June 3, the reporter received a test report. The results were surprising: The dimethyl ether content in the four liquefied gas cylinders exceeded 40%.

Island City canned liquefied petroleum gas with dimethyl ether is an open secret in the industry. In May this year, an insider of the LPG industry in Daocheng City reported to reporters that the phenomenon of bottled liquefied gas mixed with dimethyl ether is also very common in this city. It is also an open secret of the industry. Reporter unannounced visits to five liquefied gas stations, four bottles of liquefied gas all contain dimethyl ether, and the percentages are more than 40%

Third, the impact of factors analysis 1, industrial chain analysis 1.1 Supply situation This week, Henan first dimethyl ether production dimethyl ether plant, which will increase the production of dimethyl ether in Henan. This week, the DME market experienced a larger range of declines, and the downstream mentality was pessimistic. The receipt of goods was not positive. The manufacturers' high stocks suppressed the prices from falling. Although the manufacturers lowered their prices and released pressure, the shipments improved slightly, but the market downturn still caused the Weekly prices continued to decline, and some manufacturers also started to downplay the production slump. The DME operating rate was around 36% this week, which was higher than last week. Overall, this week's supply was greater than demand.

This week's performance of dimethyl ether manufacturers is more general. Affected by the continued decline of raw materials methanol and liquefied petroleum gas, the prices have fallen and the downstream purchase enthusiasm is poor. This week, Henan Province produced dimethyl ether as the first chemical dimethyl ether plant, leading to regional supply. Increase, manufacturers inventory pressure appears, the main theme of price reduction promotion cost week, the mainstream transaction price in the region at 3850-3950 yuan / ton, Shandong market performance in general this week, the mainstream transaction price in the 3980-4100 yuan / ton, factory shipments in general. In Hebei, the mainstream transaction price was 3,850-3,950 yuan per ton, and the downstream reception area in the weekend was slightly more general. This week Zhangjiagang region was downgraded by Jiutai and Xinneng. The mainstream transactions were 4,450 yuan per ton. The mainstream transaction price of this week along the river region was 4100-4150 yuan/ton, and the shipment was slightly light. Mainstream transactions in the northwest region have fallen to around 3,700 yuan/ton.

1.2 Costs Domestic methanol prices continued to fall this week. After the port market collapsed, profits were seriously reversed. Manufacturers reduced their insured prices, which eased sales pressure to a certain extent. However, signs of weaker downturns hardly disappeared in the short term, and they will continue to maintain a downward trend. Mainland markets Terminal short-term is also difficult to improve, the downstream hunters psychological breeding. The flat downstream demand also dragged down the price of methanol.

The liquefied petroleum gas market continued to decline this week. In the face of the constantly falling market trend, market sentiment was pessimistic. Downstream continuous low inventory impacted the normal diversion of refinery resources. Although crude oil rebounded and rebounded this week, it lacked substantial positive economic conditions. The recession is difficult to pull long-term growth, coupled with the continued decline of the international CP this month, cheap imported gas continues to suppress domestic prices of liquefied gas. The recent liquefied gas is hard to be favorable, and next week, the price of liquefied gas may continue to fluctuate.

2. Analysis of macro factors: In the euro area, the final value of manufacturing purchasing managers' index (PMI) fell to 45.1% in May, the lowest level in nearly three years. The latest economic data released in the United States and Europe last week coincided with a "warning bell" for recovery. In terms of employment, the recovery of the US job market was weak, and the rate of improvement was clearly lower than at the beginning of this year, while the unemployment rate in the euro zone hit another record high. In terms of economic growth and manufacturing, the growth rate of gross domestic product (GDP) in the United States in the first quarter was less than expected, while European manufacturing slowed down. G7 opened an emergency meeting on Tuesday and will hold an emergency meeting on the euro zone debt crisis on Tuesday.

Domestic side: The China Federation of Logistics and Purchasing and the National Bureau of Statistics Service Survey Center released data on the 3rd. In May, China's non-manufacturing business activity index was 55.2%, which was 0.9 percentage point lower than that in April. The People's Bank of China decided to lower the benchmark interest rate of financial institutions since June 8, 2012. The benchmark interest rate for one-year deposits of financial institutions was cut by 0.25 percentage points, and the one-year benchmark interest rate was lowered by 0.25 percentage points. The benchmark interest rates for other grades and personal housing deposit rates were adjusted accordingly. Several research institutions have estimated that after the price adjustment window opens on June 8, China's refined oil products will return to the “7” era.

IV. Conclusions and Outlook This week, the dimethyl ether market in Henan was lower than usual, and the liquid-gas market was slightly weaker. The gap between dimethyl ether and liquefied gas was already around 1,000 yuan, and the profits of dimethyl ether companies began to decline. Dimethyl ether replacement demand will be significantly weakened, and inventory pressure will increase. There will be room for decline in the operating rate next week. At the same time, the bearish sentiment of methanol is still heavy and there is little possibility of higher prices. Xiaoliang Shi, a DME analyst at the Energy Agency of the Business Community, predicts that next week, DME prices or volume will fall in the face of the double negative of low cost and flat demand.

V. Related listed companies Tianmao Group (000627), Orchid Branch (600123), Lutianhua (000912).