The market for ethylene glycol is gradually weakening towards the end of the year. In the absence of external favorable conditions, the contradiction between supply and demand of ethylene glycol is obvious, macro data is weak, and ethylene glycol has returned to fundamentals.
Data source: Jin Lianchuang
The spot market for ethylene glycol in East China fell after rising last week. At the beginning of last week, downstream factories were stocking up before the holiday, resulting in a shortage of spot goods; at the same time, as delivery approached, due to contamination of the arriving cargo and the impact of delayed shipping, the accumulation of ethylene glycol was expected to be postponed, and the market price continued to rise. In the middle of the week, downstream factory stockings were basically completed, short replenishment was nearing completion, and there was strong resistance to the high-priced spot stocks of ethylene glycol. In addition, downstream polyester production and sales are sluggish, and the operating rate is gradually declining. Demand for raw materials is weak. The market price of ethylene glycol fell sharply. As of last Friday’s close, the spot negotiation range for ethylene glycol was 5,230-5,240 yuan/ton.
Data source: Jin Lianchuang
Generally speaking, although the current maintenance intensity of polyester factories is higher than that of the same period last year The increase is close to 2.84 million tons, but the maintenance intensity of mainstream polyester factories has not increased significantly. For example, Tongkun and Xinfengming each only overhauled about 750,000 tons of production capacity, and all of them were concentrated before the Spring Festival; Shenghong planned to overhaul a total of 500,000 tons of production capacity, one before the Spring Festival and one after the Spring Festival; Hengyi Group only involved The production capacity is about 650,000 tons, and it has not yet been implemented; Hengli Group has a production capacity of 600,000 tons, all after the Spring Festival. Compared with their own total production capacity of one million tons, these maintenance production capacities are very rare.
1. In terms of port inventory:
Due to the frequent maintenance of downstream polyester factories during the Spring Festival, it is expected that ethylene glycol inventory will accumulate during the Spring Festival. The current port inventory level continues to be low compared to the same period, and there are still uncertainties such as weather in the port. The inventory accumulation is less than expected. The pressure on inventory will not be too great. MEG prices can still find support in the low inventory. The latest data from Jin Lianchuang shows that East China’s ethylene glycol inventory totaled 353,000 tons on January 16, an increase of 19,000 tons from January 9, of which 176,000 tons were in Zhangjiagang (the average daily shipment of a certain warehouse is around 11,343 tons) ; Taicang 48,000 tons; Ningbo 70,000 tons; Jiangyin 48,000 tons, Yangshan 11,000 tons.
2. The demand for raw materials from polyester factories downstream of ethylene glycol is weak:
The polyester market experienced a mild adjustment last week, and polyester factories entered into inventory accumulation. State, polyester factory equipment reduction and production shutdowns have also entered a small peak, and the polyester factory operating rate has dropped sharply. Next week, as multiple sets of polyester equipment that have been deferred for maintenance will be overhauled one after another, the comprehensive operating rate of polyester may drop to a new low this year. Last week (2020.1.10-1.16), the comprehensive operating rate of polyester filament was 78.94% (the effective production capacity of polyester yarn was 33.15 million tons), the comprehensive operating rate of polyester staple fiber was 75.91% (the effective production capacity of polyester short fiber was 7.86 million tons), and the comprehensive operating rate of polyester short fiber was 7.86 million tons. The comprehensive operating rate of grade PET is 68.66%, the comprehensive operating rate of fiber-grade PET is 80.17%, and the comprehensive operating rate of polyester is 78.63% (as of now, the effective production capacity of polyester is 60.35 million tons).
3. Judging from the operation of the device:
For new production capacity, the actual increase will be after the holiday. Currently, Zhejiang Petrochemical launched its new 750,000-ton/year MEG unit in Zhoushan on January 18. The Hengli 900,000-ton ethylene glycol unit that was commissioned before the holiday and the Inner Mongolia Rongxin 400,000-ton coal-to-ethylene glycol unit are both planned. Production and sales after the year. Moreover, the start-up of ethylene glycol operating equipment was at a relatively high level last week. Last week, the start-up load of petroleum-to-ethylene glycol was around 60.84%, the operating rate of methanol-to-ethylene glycol was around 98.7%, and the operating rate of coal-to-ethylene glycol was around 74.47%. The comprehensive operating rate of ethylene glycol was 69.24%, an increase of 2.92% from the previous week. The domestic supply increase in February is expected to be obvious.
Jin Lianchuang predicts that the ethylene glycol market may be weak in the near future. As the conflict between the United States and Iran has eased, international crude oil prices have continued to fall, and the cost support for ethylene glycol has loosened. The ethylene glycol market returns to fundamentals. The expected increase in ethylene glycol supply and shrinking demand are gradually realized, and the ethylene glycol market has returned to weakness. It is expected that the spot negotiation of ethylene glycol this week will be likely to be in the range of 5,000-5,300 yuan/ton. It is still necessary to pay attention to the specific changes in import volumes and inventories. </p
