On August 4, the market price of ethylene glycol in East China rose sharply. The market price in Zhangjiagang rose from 5,300 yuan to 5,500 yuan, an increase of up to 3.8%. This price increase was mainly caused by the supply side.
International supply:
Recently, two sets of ethylene glycol units in Saudi Arabia have shut down due to malfunctions, with a total production capacity of 1.34 million tons. They are currently shut down. The duration is under evaluation and the restart time is to be determined. Saudi Arabia is my country’s largest importer, with about 40% of imports coming from Saudi Arabia. The unexpected shutdown of the Saudi plant brought support to the ethylene glycol market price. At the same time, Canada’s three sets of ethylene glycol units of Dow were also overhauled as planned, with a total production capacity of 1.23 million tons. According to the import situation of ethylene glycol in the first half of this year, Canada’s share also reached 14%. The unexpected reduction in overseas supply provides upward momentum for ethylene glycol market prices.
Domestic supply:
On the one hand, due to crude oil quota issues, a large factory in Zhejiang cannot support the normal start-up of all phase 2 refining units and the operating load The downward adjustment, the supply reduction in East China, and the temporary closure of the port yesterday morning, fueled by speculation, have created a strong atmosphere for rising market prices.
On the other hand, the operating rate is at a low level, especially the syngas production process. Since June, the syngas to ethylene glycol unit has begun frequent maintenance. In June 2021, the operating rate of syngas to ethylene glycol was approximately 44.95%, a month-on-month decrease of 19.95%; while maintenance equipment continued to increase in July, and the restart time of early maintenance plants was repeatedly delayed. In July 2021, my country’s syngas to ethylene glycol The operating rate was as low as 39.93%, a month-on-month decrease of 11.17%, and the operating rate dropped again to below 40%. The last time such a low value was seen was during the outbreak of the epidemic in 2020. The low start-up will inevitably lead to a significant reduction in the output of syngas to ethylene glycol. According to Baichuan Yingfu statistics, the output of syngas to ethylene glycol in June was approximately 246,000 tons, a month-on-month decrease of 22.54%; although Hubei Sanning had and Jianyuan coking supply, but the output has not increased significantly. Syngas output in July was approximately 259,000 tons, an increase of 5.29% month-on-month. Domestic ethylene glycol has been in a slightly tight supply situation for a long time, and any good news will stimulate an increase in market prices.
Forecast of the market outlook:
Will the market price of ethylene glycol continue to rise? the answer is negative.
First of all, the demand side is weak. Although the downstream polyester industry has a high operating load, the actual sales situation is not good. Yesterday afternoon, I heard that a major mainstream factory in Tongxiang, another major factory in Tongxiang, a major major factory in Xiaoshan, a major major factory in Shaoxing, and a major major factory in Taicang were promoting. The discount ranges from RMB 300 to RMB 350 per ton depending on the quantity and specifications, and we will discuss some of the varieties that are in stock. The overall performance was sluggish, with no new orders from various manufacturers.
The second is the suppression of new ethylene glycol production capacity. From August to September, five new domestic units are planned to be put into operation. The long-term supply pressure is relatively large. In addition, the production of syngas production is gradually increasing. To digest the import gap, under the situation of oversupply in the entire industry, the increase in ethylene glycol market price is ultimately short-lived, and the future is still mainly bearish. It is expected that the price of ethylene glycol in the East China market will mainly fall in the near future, with the price range being 5,200-5,400 yuan. /Ton. </p
