Ethylene glycol has gained gratifyingly today. The futures price has exceeded the previous high, with an increase of around 4%, and the spot price has soared to a high of 4,800 yuan/ton. From a logical point of view, the rise in the market is mainly based on the following aspects:
(1) New additions are delayed and domestic production increases are suppressed
New installation progress tracking in the first quarter
The commissioning of new production capacity is delayed, so far The new production capacity from January to February is mainly based on the syngas route. The actual progress of the integrated device will be after April. Based on the consideration of the production-mass production time cycle, it is difficult to put into production the new domestic ethylene glycol device before April. to effective output.
Based on the recent decline in prices and related product ethylene oxide prices, ethylene glycol units Integrated production conversion is the main focus, and the enthusiasm of coal chemical companies to resume work has also improved (the article Ethylene Glycol: Return of Production Start-Up under Price Stimulation has detailed data analysis). From a quantitative comparison, the amount of maintenance losses in February was significantly lower than that in January.
(2) Imports remain low.
European and American prices remain high, and under the rebalancing of global supply, domestic ethylene glycol imports Continued contraction, domestic ethylene glycol imports dropped to 740,000 tons in October, and began to shrink sharply in November. In December, ethylene glycol imports were only 550,000 tons. Excluding shipping schedules caused by force majeure such as terminal closures in December The importer’s initiative to reduce import volume is the main reason for the sudden drop in import volume. Judging from the tracking of current arrivals in January, the expected import volume is basically around 650,000. However, due to maintenance by importers in the Middle East from February to March, it is difficult for import volume to rebound substantially.
(3) The demand for polyester is relatively strong
Downstream polyester sales weakened year-on-year but remained strong month-on-month. At present, the polyester end’s load reduction and maintenance capacity due to the Spring Festival is around 99.5-9.9 million tons, and the operating load is expected to drop to about 76%-78%; (the operating load in the same period last year was around 75%); under the same load, polyester The daily output has increased significantly. As of now, the polyester production capacity base is 63.025 million tons, the average daily output is around 140,000 tons, and the equivalent daily consumption of ethylene glycol is around 47,000 tons; consumption has increased by 16.7% year-on-year.
(4) Reshaping of the market supply and demand balance
With the recent changes in ethylene glycol supply and demand, especially the supply side, the market is optimistic about 2021 The perception of the supply and demand balance in the first quarter of this year was reshaped, and the entire first quarter changed from the expectation of strong inventory accumulation to the expectation of destocking. Breaking it down, there is a slight possibility of inventory accumulation in February due to the Spring Festival. However, based on the strong destocking in January and the impact of factory replenishment driven by the market’s expectation of resumption of work in March, the entire ethylene glycol balance in the first quarter is based on the logic of destocking. Lord.
From an overall perspective, the market with benign supply and demand performance coupled with cost support has no downside, laying the foundation for the current rise in ethylene glycol prices.
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