On November 27, China’s 50th commodity futures, pulp futures, was listed on the Shanghai Futures Exchange. As an upstream raw material for the paper industry, pulp futures have attracted much attention since their birth. According to past experience, in the domestic market, whether it is the futures market or the stock market, when a new product is launched for online trading, there is a high probability that it will gain popularity in a short period of time.
As a result, on the first day of listing, all six varieties of pulp futures listed for trading fell by the limit.
Although pulp futures have little to do with the textile industry, on the first day of listing That is to say, the occurrence of the limit drop has cast a shadow over the upcoming listing of ethylene glycol futures.
Recently, the China Securities Regulatory Commission officially announced that it has approved the listing and trading of ethylene glycol futures contracts on the Dalian Commodity Exchange on December 10 this year. This is another chemical product launched by Dalian Commodity Exchange after linear low-density polyethylene, polyvinyl chloride and polypropylene futures. From the perspective of the entire polyester chain, the raw materials produced by polyester companies are mainly PTA and ethylene glycol. Therefore, for textile workers, the price of ethylene glycol directly affects the cost of raw materials, and the listing of its futures is definitely a major event worthy of attention. What about the recent ethylene glycol market?
The polyester industry chain has collapsed, and ethylene glycol is on the downward path
Since September, the high-level polyester raw materials have begun a plunge, and ethylene glycol has naturally No exception. On September 5, the internal spot price of ethylene glycol was still 8,255 yuan/ton. On October 31, it became 6,840 yuan/ton, a drop of 1,415 yuan/ton.
In November, the free-falling price decline mode of the polyester industry chain has not ended. Since mid-term, under the wave of short attacks, the polyester industry chain has collectively collapsed, regardless of the PX, PTA, ethylene glycol, polyester chips, and polyester filament are all in the process of going all the way down. In this general decline in the polyester industry chain, ethylene glycol, which has always been independent, cannot escape the decline. As of November 26, the internal price of ethylene glycol has dropped below 6,000 yuan/ton, closing at 5,660 yuan/ton.
The sustained and deep decline of crude oil in the recent stage has triggered a series of reactions in the polyester industry chain, which has made the original The sluggish polyester market is even worse. The pessimism in the polyester market continues to ferment. Prices in the industry chain have reached new lows, but the bear market has not yet bottomed out.
Supply exceeds demand and may continue to weaken in the future
Currently, downstream demand is weak, and the supply of ethylene glycol is still abundant. Judging from this year’s import volume, as of September, the total import volume of ethylene glycol was 7.53 million tons, which was 930,000 tons higher than the total volume in the same period last year. The downstream fabric market missed appointments during the peak season, there were insufficient orders in the fabric weaving market, and the polyester market continued to be weak in production and sales. The polyester filament market inventory accumulated in advance. The total inventory in November has exceeded the inventory high during the Spring Festival in 2018. Nowadays, polyester manufacturers have reduced production and polyester production has dropped, which has directly hindered the demand for ethylene glycol.
In terms of equipment, as of last Friday (December 23), the price of ethylene glycol was around 5800 Yuan / ton. The MEG unit load is currently 77.31% (total capacity: 10.555 million tons).
The maintenance updates are:
1. A MEG device in Saudi Arabia with a capacity of 770,000 tons is scheduled to be shut down for maintenance in the near future and a capacity expansion plan is underway. , the estimated maintenance time is 45 days.
2. A MEG unit with a capacity of 400,000 tons in the Sinopec Fuzhou Refinery Project is scheduled to be shut down for maintenance on November 12, and the maintenance is expected to last 40-45 days.
3. The maintenance time of a 150,000-ton ethylene glycol plant in East China has been advanced to late December, and the maintenance time will be more than a month.
Overall, due to downstream drag, the future demand for ethylene glycol is restricted, the overall operating load remains basically stable, and the situation of oversupply is difficult to reverse in a short time.
Editor’s note
As international oil prices continue to fall, products within the polyester industry chain have begun to fall in price in a free fall. The future crude oil market is still unclear, and downstream demand has not improved significantly. After seeing the tragic image of pulp futures falling to the limit on the first day of listing, how will ethylene glycol futures perform after they are officially launched? Please wait and see.
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