According to the Commodity Market Analysis System of Shengyishe, the roller coaster trend of the domestic dimethyl ether market in 2023 was characterized by a volatile decline in the first half of the year, followed by an initial rise followed by a decline in the second half, with an overall decline. On January 1st, the average price of dimethyl ether in Henan Province was 4450 yuan/ton, and on December 31st, the average price of dimethyl ether was 3775 yuan/ton, a year-on-year decrease of 15.17%.

Market Review

The dimethyl ether market in 2023 was not satisfactory due to its own supply and demand and cost factors. In January, the domestic dimethyl ether market steadily rose, with a slight increase mainly driven by the Henan market for dimethyl ether. Starting from the beginning of the month, the downstream stage replenishment began, and the atmosphere of on-site transactions became stronger. The low inventory of dimethyl ether enterprises actively pushed up. As the Spring Festival approaches, the peak of downstream restocking has passed, and prices have stopped rising and stabilized. Starting from February, due to the dual negative effects of cost and demand, the dimethyl ether market entered a downward trend, fluctuating all the way down to the end of May. In early June, the price of raw material methanol stopped falling and rose, and cost support gradually strengthened. Dimethyl ether took advantage of the situation and began to rebound from the bottom. Purchasing and sales improved, and the atmosphere gradually warmed up. In the future, the downstream market entered the peak season of gold, silver, and ten demand, and the price increase continued until mid October. Subsequently, due to the increase in factory operating load in the early stage and the increase in market supply after the peak demand season, the demand side returned to a weak position, and the price of dimethyl ether rose and then fell back to the end of the year.

As a direct upstream methanol of dimethyl ether, the upstream methanol showed a V-shaped trend in 2023. In the first half of the year, the market continued to decline, and under the combined influence of lower than expected macro support, loose costs, and fundamental supply-demand contradictions, the domestic methanol market fluctuated and declined. The bottom of the second half of the year rebounded, coal prices remained stable with some increases, port olefin facilities gradually started operating, domestic demand recovered, overall demand improved, supply recovery fell short of expectations, macro improvement, and the market showed a fluctuating upward trend. Subsequently, the domestic market presented a situation of strong supply and demand, with no prominent fundamental contradictions, and the market entered a stalemate and consolidation stage in the fourth quarter.

Future Market Forecast

From the trend of dimethyl ether in the past three years, there is no bright spot in the dimethyl ether market in 2023, and the price has been lower than in previous years since November. From the perspective of supply and demand in the domestic dimethyl ether market, the current production capacity of dimethyl ether is 7.5 million tons. However, in 2023, the production was less than 1 million tons, and the production has been decreasing year by year, with a significant decline, indicating a weak demand side. From a cost perspective, methanol, as the main raw material for dimethyl ether, its price fluctuations will directly affect the cost of dimethyl ether. Self use enterprises adopt production reduction and pressure reduction measures, while external methanol enterprises are under sales pressure, resulting in long-term negative profit growth in 2023. In the short term, cost support is relatively weak, and there is insufficient action on dimethyl ether. Based on a comprehensive analysis of cost, supply and demand, and policy, the supply and demand of the dimethyl ether market and cost pressures will continue to rise in 2024. It is expected that the price center of dimethyl ether may continue to decline compared to 2023, but due to the current near bottom of dimethyl ether prices, the expected decline is relatively controllable. Taking the Henan market as an example, it may fluctuate within the range of 3500-4500 yuan/ton in 2024, with a high-frequency fluctuation range of 4300-4500 yuan/ton. It is expected that the market price will have a low point in the first quarter and a high point in the third quarter.

The market for styrene butadiene rubber in December fell first and then rose. According to the commodity market analysis system of Shengyishe, as of December 29th, the price of butadiene benzene 1502 was at 12391 yuan/ton, an increase of 4.64% from 11841 yuan/ton at the beginning of the month, and the lowest point in the cycle was 11458 yuan/ton. The supply of styrene butadiene rubber in December was loose in the early stage and slightly tight at the end of the month; Downstream tire production has slightly declined due to environmental factors, and market transactions have been lackluster; The raw material butadiene experienced a significant decline in the early stage and a slight rebound at the end of the month, while the price of styrene slightly increased. The cost support for butadiene styrene rubber was weak. At the beginning of the month, the butadiene rubber market was mainly affected by a sharp drop in butadiene prices and a loose supply side, resulting in weak prices; At the end of the month, on the one hand, the price of raw material butadiene rebounded, while the price of styrene slightly increased. In addition, due to the negative impact of the Qilu plant, the short-term supply side of the market tightened, stimulating the price of butadiene styrene rubber to rise.

In December, the supply of styrene butadiene rubber was initially loose, but in the latter half of the month, it was slightly tightened due to the negative impact of the Qilu plant.

In December, the price of butadiene, a raw material for styrene butadiene rubber, fell significantly in the early stage and rebounded slightly at the end of the month, while the price of styrene rose slightly. The cost support for styrene butadiene rubber was weak.

According to the commodity market analysis system of Shengyishe, as of December 29th, the price of butadiene was 8575 yuan/ton, a decrease of 6.03% from 9125 yuan/ton at the beginning of the month, and the low point in the cycle was 8058 yuan/ton; As of December 29th, the price of styrene was 8560 yuan/ton, an increase of 1.90% from 8400 yuan/ton at the beginning of the month.

The natural rubber market rose in December, providing slight support for styrene butadiene rubber. According to the Commodity Market Analysis System of Shengyishe, as of December 29th, the price was 13060 yuan/ton, an increase of 3.00% from 12680 yuan/ton at the beginning of the month, and the lowest point in the cycle was 12300 yuan/ton.

Demand side: In December, tire production remained stable in the early stage and decreased in the later stage due to factors such as environmental protection and off-season, which weakened the support for rubber demand at the end of the month. It is understood that as of late December 2023, the operating load of all steel tires in rubber tire enterprises in Shandong region was 4.90%; The operating load of semi steel tires in domestic rubber tire enterprises is 7.8%.

Market forecast: Business Society analysts believe that currently, the supply of styrene butadiene rubber is tight in the short term, with some support from the cost side, but the demand side is weak. It is expected that the price of styrene butadiene rubber will fluctuate slightly and fall slightly in the later stage as speculation weakens.

The market situation of trichloromethane in December fell first and then rose. According to the commodity market analysis system of Shengyishe, as of December 29th, the price of trichloromethane bulk water in Shandong Province was 2070 yuan/ton, an increase of 0.16% from 2066 yuan/ton at the beginning of the month, and the low point in the cycle was 2000 yuan/ton. The start of domestic methane chloride plants in December was affected by the shutdown of some enterprises, resulting in a decrease in the supply of trichloromethane; There is no significant positive support for downstream refrigerant demand, and refrigerant production is basically stable. In the second half of the month, some enterprises replenished their inventory, and the demand for trichloromethane was slightly supported, resulting in a slight rebound in prices.

The domestic methane chloride plant operation in December decreased compared to November.

In December, the price of raw material methanol fluctuated and decreased, while the price of liquid chlorine continued to decline. The cost support for trichloromethane weakened. According to the commodity market analysis system of Shengyishe, as of December 29th, the spot price of methanol was 2450 yuan/ton, a decrease of 2.20% from the beginning of the month’s 2505 yuan/ton, with a high point of 2505 yuan/ton and a low point of 2420 yuan/ton during the cycle; At the end of December, the price of liquid chlorine tank trucks in Shandong region dropped significantly at -100 yuan/ton.

Downstream refrigerant demand is weak, and production remains stable at a low level. In the second half of the month, some enterprises replenish their inventory in small quantities, which provides some support for trichloromethane. In 2023, the total production quota for R22 will be reduced by 19% to 181800 tons, and overall support for the demand for trichloromethane will weaken in the medium to long term. The quota for 2024 has not been released, but it has little impact on the production schedule of refrigerant manufacturers.

The methane chloride data analyst from Business Society believes that demand for trichloromethane is still weak in the face of support, coupled with lower raw material prices, and it is expected that the trichloromethane market will narrow in the short term. From a medium to long term perspective, under the condition of no strong cost support, the market for trichloromethane will basically show a trend of range fluctuation and consolidation due to demand constraints.