After entering March, ethylene glycol experienced violent fluctuations. First, it continued the upward trend in February, and the spot price reached a high of 6750-6800 yuan/ton. With the strong support of commodities and the optimistic resonance of supply and demand expectations in March, ethylene glycol has once again become the leading chemical product after many years, which has attracted great attention from the market for a while.
However, the good times did not last long. Just when the market bulls were looking forward to ethylene glycol continuing to break through and opening up a new upward space, the market situation suddenly changed, and crude oil surged higher and fell, leading to a collective correction of chemical commodities. The willingness to ship ethylene glycol, which has accumulated a large amount of profit-making orders, has greatly increased, causing a concentrated stampede by bulls, and the price fell rapidly. On March 12, the closing price of ethylene glycol in East China was 5,465 yuan/ton, hitting the lowest point in March. , this point fell 21.1% from the highest point. At the same time, ethylene glycol went from being a star on the profit list, which attracted much attention, to being frantically suppressed as soon as it showed signs of rebounding. In just a few trading days, the contrast was so great. What happened during this period is of great concern.
To explain this reversal, first let’s look at the main driving force behind the increase in ethylene glycol’s price of more than 1,000 yuan. At the beginning of the increase, the market mainly speculated on the low selling value of ethylene glycol. You must know Ethylene glycol in chemical products in 2020 can be described as miserable. Led by crude oil, many chemical products have surged. In the second half of the year, most of them recovered the decline in the first half of the year. Some products even hit new highs in recent years. However, ethylene glycol Although ethanol has risen from the bottom in the first half of the year, it is still struggling at the bottom of history. The low selling value triggered funds to make a long move on ethylene glycol before the Spring Festival, which coincided with the US ethylene glycol installation during the holidays. Due to the extremely cold weather, after the holiday, ethylene glycol finally ushered in an outbreak. In just half a month, this long-lost super market was completed. In the blink of an eye, the bulls were full and the bears were everywhere, but the market entered During the craziest hype, the main logic changed. After the sharp increase, the low selling value no longer existed. The profit levels of ethylene glycol of all processes surged sharply. The focus of market speculation became the decrease in imports in March and the decrease in main port inventories. Next, the bullish and short squeeze market will push the market to a new height.
The logic of forced positions is a false proposition in market speculation, because the market is always a market of long and short games. If the mentality of the bulls is stable and the sellers are reluctant to sell, the short squeeze market will It will appear. However, the market rose too fast in March and after the market reached a new height, once the bulls with huge profit margins encountered a slight disturbance in the market, they would rush to settle for safety. From March’s Judging from the basis in the first week, the spot and market basis did not strengthen due to the approaching delivery date of paper goods, but weakened, proving that the spot market has obvious profit-taking ideas, and when crude oil peaks, it triggers chemical industry The upward trend of commodities ended, bulls’ confidence was frustrated, and they rushed to ship. The market reversed, and the short squeeze market turned into a long squeeze market, and the basis difference between spot and futures fell sharply.
The spot market has failed, and the futures delivery month has exceeded expectations, which explains the rapid reversal of this market. After a sharp retracement, the current spot price of ethylene glycol has basically returned The current fundamental price is normal, so the market in March has limited significance for longs and shorts at this point, as both longs and shorts are seeking the emergence of new entry nodes. The market performance will be a tug of war between long and short, but from the perspective of the future supply pattern, new ethylene glycol production capacity will be launched one after another, and with the gradual increase in overseas device load, the oversupply situation will be irreversible in the future, and ethylene glycol will become a short position. important members. </p
