Introduction: After the holiday, the ethylene glycol market in East China plunged after opening and has remained weak. Recently, new equipment has been put into production and supply pressure continues to increase. The situation of the resumption of downstream polyester production is not optimistic. The contradiction between glycol supply and demand has intensified. In the absence of external favorable conditions, the ethylene glycol market maintains a weak consolidation situation.
The East China ethylene glycol market has consolidated weakly after a recent plunge. International crude oil prices continued to fall during the Spring Festival. Ethylene glycol cost support is limited. At the same time, affected by the epidemic, the social inventory accumulation of ethylene glycol was higher than expected, the resumption of downstream polyester production was delayed, and the demand for raw materials was insufficient. The oversupply caused ethylene glycol to plunge sharply when the market opened on Monday. It closed at 4,250 yuan/ton that day. Ethylene glycol rebounded and consolidated in the following days, but due to the strong negative fundamentals of ethylene glycol itself, it was difficult to return to the pre-holiday price. At the close of trading on Tuesday, the negotiated price in the ethylene glycol market was around 4380-4385 yuan/ton.
In terms of ethylene glycol supply, since the ethylene glycol unit has been in a state of loss last year and not much production capacity has been put into production, the current operating rate of ethylene glycol plants has increased compared with before the holiday. The overall operating load of the industry is 70.38%; due to the restriction of logistics due to the domestic epidemic, factories have accumulated inventory, and port inventory has also accumulated. Supply pressure has increased compared with before the holiday, but inventory pressure is not great. Recently, Hengli Phase I and Zhejiang Petrochemical plants have been put into operation one after another, and about 3.5 million tons of new production capacity is expected to be put into operation in the first quarter. If the operation goes smoothly, supply pressure is expected to increase further.
After the recent decline in futures prices, the losses of production companies have further expanded, especially the losses of coal-based companies have become more obvious. The start-up of coal-based MEG has declined, which will have an impact on prices to a certain extent. It brings support, but without the positive boost from the demand side, it is difficult for futures prices to rebound in real terms and is expected to continue to fluctuate.
Jin Lianchuang’s latest data shows: East China’s ethylene glycol inventory totaled 559,000 tons on February 6, which was higher than that on January 16 The daily increase was 206,000 tons, including 259,000 tons in Zhangjiagang; 98,000 tons in Taicang; 105,000 tons in Ningbo; 68,000 tons in Jiangyin and 29,000 tons in Yangshan.
In terms of demand, due to the impact of the domestic Spring Festival holiday and public health incidents, the downstream polyester and terminal textile industries have made slow progress in resuming work. As of March 10, the overall operating rate of polyester reached 66.62%. . At present, due to the delay in the start of construction due to public health incidents and restrictions on logistics and transportation, the industry chain has accumulated inventory.
In the later period, we will pay attention to the turning point of the epidemic. In the short term, under the environment of increased supply and weak downstream demand, the fundamentals are bearish.
</p
