Five concerns
1/China’s MEG production capacity increase will be in 2021 A record high of 5.84 million tons, an increase of 42%, which is 27% higher than the demand growth
2. China’s MEG production is expected to reach 10.2 million tons in 2021, an increase of 14.62%
3. The decline in import volume in 2021 will be as high as one million, or around 10.15 million tons, and the year-on-year import decline is expected to be 8.34%
4. The increase in annual MEG consumption is expected to slow down to around 370,000 tons
5. High inventories will become the norm, and port inventories are expected to accumulate around 100,000 tons at the end of 2021.
1. China’s MEG production capacity increase will hit a record high of 5.84 million tons in 2021, an increase of 42%, which is higher than demand Growth of 27%
Based on the comparison between MEG annual production capacity and spot prices from 2011 to 2020, it was found that the correlation coefficient between the two was -82.93%, indicating a strong correlation and a negative correlation.
From 2011 to 2020, EG production capacity increased by 11.81 million tons, an increase of 305%, and an average annual growth rate of 13%. The average price of MEG fell from 9182 in 2011 to 3848 in 2020. , a decrease of 58.09%. Data shows that as production capacity increases year by year, the average price of MEG declines at an average annual rate of 9.21%; especially in the past ten years, MEG has experienced three waves of concentrated capacity expansion in 2015, 2018, and 2020, of which production capacity increased by 265% in 2015. million tons, an increase of 48%. The average price fell by 840 yuan that year, a decrease of 14%; the increase in production capacity in 2020 hit a record high. The production capacity increased by 4.65 million tons that year, an increase of 42%. The average price hit a new low since 2007, to 3848 yuan. / ton, a decrease of 23%;
Learning from history, we can know the rise and fall: In 2021, according to statistics from Longzhong Information, domestic new MEG production capacity will be 5.84 million tons, and the increase in production capacity will once again Refreshing a record high, production capacity growth is expected to reach 37.25%. The production capacity of PET in the main downstream field will grow by 9.6% in 2021, and the supply growth rate is 27 percentage points higher than the demand growth.
Statistical table of domestic new production capacity in 2021
Unit: 10,000 tons
2. China’s MEG production is expected to reach 10.2 million tons in 2021, an increase of 14.62%
Data show that China’s MEG output in 2020 was 8.89 million tons, an increase of 6.02 million tons compared with 2011, an increase of 210.54%, and an average annual growth rate of 13.42%. During the same period, the annual average price dropped by 5,334 yuan compared with 2011, a cumulative decline of 58.91%, and the average annual decline reached 9.21%.
In terms of annual production increment, the average annual production growth from 2013 to 2016 was 532,400 tons, with an average annual growth rate of 11.7%. During the same period, the MEG price in 2016 dropped by 2,379 tons compared with 2013. Yuan, a decrease of 10.08%; as MEG production capacity exceeded 10 million in 2018, the average annual output from 2018 to 2020 increased by more than 1 million tons to 1.02 million tons/year. What is particularly noteworthy is that in 2019, the increase in output It broke through 1 million tons for the first time and reached around 1.34 million tons. During the same period, the price dropped from 7244 yuan in 2018 to 3848 yuan in 2020, with a cumulative drop of 3396 yuan, a decrease of 46.87%, which was almost halved.
It is expected that 5.84 million tons of new production capacity will be put into operation in 2021, including 3.88 million tons of petroleum-to-ethylene glycol units and 1.96 million tons of coal-to-ethylene glycol units. Refer to the commissioning of new units. It is expected that the increase in production released that year is expected to be 3.49 million tons; at the same time, according to the maintenance plan of in-production enterprises surveyed by Longzhong in 2021, the loss from MEG production reduction in 2021 is expected to be 2.18 million tons (excluding conversion to EO). It is expected that in 2021 The annual production increase after hedging is 1.3 million tons, and the total volume is expected to reach 10.2 million tons, an expected increase of 14.62%.
Domestic ethylene glycol plant maintenance plan and loss statistics in 2021
Unit: 10,000 tons
3. Imports in 2021 The volume will fall by as much as one million, or to around 10.15 million tons, and imports are expected to fall by 8.34% year-on-year
Based on 2011-2020 A comparison of annual MEG output and spot prices found that the correlation coefficient between the two was -68.85%, indicating a strong negative correlation.
In 2021, China’s MEG import dependence is 55.49%. Imports are the main component of domestic supply. As of 2021, China’s MEG imports are 11.07 million tons, an increase of 3.85 million tons compared with 2011. , an increase of 53.37%, with an average annual growth rate of 4.87%. During the same period, prices fell by 5,334 yuan, a decrease of 58.09%, with an average annual decrease of 9.21%.
From the perspective of the growth pattern of import volume, the changes in imports in the past ten years can be divided into three stages. The first stage: 2012-2015, China’s MEG import increase was between 20- Between 700,000 tons, the average annual increase is 38.47%, the average annual growth rate of stage imports is 2.19%, and the price fell by 4.65% during the same period;
The second stage: MEG production capacity growth in 2016 5.4%, output increased by 14.03%, downstream PET production capacity dropped from 4665 to 4652, down 0.27%. The growth of domestic production and the weakening of domestic demand diluted China’s demand for imported MEG. At the same time, that yearOil fell to around US$26/barrel, and the collapse of costs further suppressed demand. As a result, China’s MEG imports fell by 13.67% in 2016 (domestic production increased by 14.02%). The price fell by 9.71% that year. Cost collapse, shrinking demand, and self-sufficiency resonance led to In 2016, both the volume and price of MEG fell;
The third stage: following the correction of import volume in 2016, between 2017 and 2020, the annual growth in import volume basically returned to 100%. At the level of 10,000 tons, the average annual increase is 875,200 tons, with an average annual growth of 8.16%. The growth rate is nearly 30% lower than the first stage. The domestic self-sufficiency rate continues to increase. During the same period, the price fell by 3,244 yuan/ton, a decrease of 45.74%, and the average annual price dropped. 18.43%. This period is the fastest decline in MEG prices since 2011. China’s import dependence dropped by 16.14% in 2020 from 2011 to 55.49%.
Looking forward to 2021: As mentioned earlier, China’s production capacity is expected to increase by 42% and output by 14.62% in 2021, while the growth rate of downstream polyester production capacity is within 9%, which will be further squeezed Imports are expected to decline by as much as one million in 2021, or to around 10.15 million tons, and imports are expected to decline by 8.34% year-on-year.
4. The increase in MEG consumption in 2021 is expected to slow down to around 370,000 tons
In 2020, China’s apparent consumption of MEG was 19.95 million tons, an increase of 9.87 million tons or 97.99% compared with 2011. In the past 10 years, China’s consumption of MEG has nearly doubled. During the same period, the annual average price Compared with 2011, it dropped by 5,334 yuan, with a cumulative decline of 58.91%, and an average annual decline of 9.21%. (Apparent consumption is calculated based on output, import and export. The main components of domestic supply and demand have been briefly introduced, so I will not go into details here)
Outlook for 2021: According to According to the previous data, the output in 2021 is expected to be 1020, the import is expected to be 1015, and the export is basically negligible. Temporarily using last year’s 11,600 tons data, it can be concluded that the domestic apparent consumption in 2021 is expected to be 20.33 million tons, which is 370,000 tons compared with 2020 consumption. tons, an increase of 1.89%.
5. High inventories will become the norm, and port inventories are expected to accumulate around 100,000 tons at the end of 2021.
In 2018-2020, dragged down by the imbalance of supply and demand growth, inventory accumulation once again appeared, forcing the inventory to rise to 800,000 tons, with a cumulative increase of 260,000 tons in three years, an increase of 55.91%, corresponding to a price drop of 3,396 yuan/ton, a decrease of 46.87% in the same period.
From 2011 to 2020, China’s MEG generally showed a situation of loose supply and demand. In 6 years, the ending inventory was positive. That is, the inventory is accumulated during the year, and at the same time, prices have declined to varying degrees during the inventory accumulation stage, as shown in the figure below:
Causing library accumulation The main reason is the imbalance between supply and demand. However, since 2020, the imbalance between supply and demand will become more serious. As mentioned earlier, the growth rate of MEG China’s production capacity far exceeds the downstream growth rate by 27 points. The data also shows that the gap between incoming supply and demand continues to expand. Trend, MEG high inventory will gradually become the norm. According to Longzhong research data, it is expected that by 2021, China’s polyester consumption of MEG will increase by 1.22 million tons, MEG production will increase by 1.3 million tons, and the accumulated inventory is expected to be around 100,000 tons.
</o:p
