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.