Introduction: In recent trading days, the performance of international crude oil has been sluggish and continued to decline. At the close of April 28, WTI continued to fall; however, the joint production reduction agreement is about to be implemented, and Brent rebounded. The WTI 06 contract fell by US$0.44/barrel at 12.34; the Brent 06 contract rose by US$0.47/barrel at 20.46, with the closing price at a historical low.
However, the trend of crude oil has not had a negative impact on ethylene glycol. On April 24, after the spot price of ethylene glycol bottomed out near 3200 and found support, there has been a continuous rebound in the past two or three trading days. Trend: The rally expanded again in early trading today. The main futures contract opened higher and moved higher. It was at the forefront of the increase in the chemical sector. The spot price in East China also rose to around 3,400 yuan.
The current logic supporting the rise of ethylene glycol is as follows:
Main port inventories have ended the trend of continued growth
AccordingtoLongzhongdatamonitoring,inventoryatthemainportinEastChinareacheditspeakduringtheyearsinceApril16Afterreaching1.15milliontons,therehasbeenacontinuousdownwardtrend.OnApril27,themainportinventorywasat1.0603milliontons,adecreaseofnearly100,000tonsfromthepeak.Theinventoryhasbeendecliningforhalfamonth,makingmarketparticipantsseethattheinventoryisexpectedtoreachaninflectionpoint.,enhancingtheconfidenceofbulls.
Domesticethyleneglycoloperatingratehasalwaysremainedlow
After entering April, the domestic ethylene glycol operating rate has increased A downward trend. Affected by profits, the operating rate of coal-to-ethylene glycol has dropped to more than 40%. The operating rate of non-coal-based ethylene glycol has a higher profit level, but it has also declined due to the short-term shutdown of several large-scale equipment. However, it has continued to decline in recent days. Normally, there has been a rapid rebound in construction, and the comprehensive operating rate has been dragged down by the coal-based operating rate and remains at a level of around 55%.
Downstream polyester raw materials have been subject to repeated speculation, and the polyester operating rate is not as bad as expected
After entering April, there has been a cycle of speculation in polyester raw materials. First, there was a price reduction promotion, which attracted some bargain-hunting funds to intervene, which greatly reduced the inventory pressure of manufacturers. Then came the hype of mask raw materials, which caused The production and sales of staple fiber products are booming, with both prices and volumes rising. At the end of the month, there was also hype about the concept of polyester taffeta and pongee gray fabrics for protective clothing, which caused the polyester filament to be hot for a few more days. Affected by the above factors, the operating rate of polyester There was no load reduction as expected. On the contrary, the load increased significantly compared with March. During most of April, the polyester operating rate remained in the 80-85% range, and the positive demand side provided greater positive support for ethylene glycol.
With the May Day holiday approaching, some funds have withdrawn from the market
Due to the fact that this year’s May Day holiday lasts for five days and the current international macroeconomic environment is violently volatile, futures exchanges have significantly increased their futures products. Affected by many factors such as the margin ratio, speculators in the futures trading market have significantly reduced their positions. In the early stage, ethylene glycol was a short-allocated product, and the liquidation of funds was mostly a buying operation, which also provided certain assistance for the rise in the market.
So how sustainable is the current trend of ethylene glycol? It has become the focus of market attention. Personally, I believe that the above positive factors do not support a reversal in the market. The main reasons are as follows.
The decline in inventory does not mean the emergence of an inflection point
The inventory in the main port of East China has continued to decline. The main reason is that the tank capacity is currently tight. Many goods are due to lack of tanks. It cannot be included in inventory statistics. This can be seen from the shipment volume in April. The average daily shipment volume of a mainstream irrigation area in East China was around 6,000 tons, while it was 8,600 tons in the same period last year, a drop of up to 30%.
It remains to be seen whether the high operating rate of polyester can be sustained
The high operating rate of polyester is caused by artificial hype, limited terminal digestion, and product inventory is only realized The transfer of factory inventories to public inventories has also raised concerns about the polyester market in May. Therefore, there is a high probability that the polyester operating rate will decline in May.
After the long holiday, funds will be reallocated
Before the holiday, funds chose to reduce their positions, which increased the buying momentum for ethylene glycol. However, if funds are reallocated after the holiday From the perspective of supply and demand structure, ethylene glycol is still an empty product, and empty orders may be re-intervened. Therefore, ethylene glycol is facing greater callback pressure.
To sum up, there is currently a strong rise in ethylene glycol, which does not mean that it will reverse the trend. Therefore, it is not appropriate to be too optimistic in operation. Bulls should It is advisable to take the opportunity to reduce positions. </p
