On March 13, just after a quiet weekend, when market participants were preparing to enter the new week of market trading, electronic trading ethylene glycol hit the daily limit on Monday. This time the price limit came too fast, too sudden, and too surprising, because after the ethylene glycol market experienced a decline throughout February, the short-selling atmosphere in the market remained unabated until early March, and the electronic trading on March 13 A single daily limit seems to have reversed the entire decline in February overnight. Does ethylene glycol indicate the dawn of bottoming out and rebounding?
Looking at the underlying reasons for this wave of rise in early March, the analysis believes that it must start from the fact that ethylene glycol hit the lower limit in electronic trading on the last trading day in February. At that time, the market basically set the tone for the decline in early March, and the market was short-selling. With further increase, short covering in the second week of March, and the futures delivery period in mid-March, spot covering is more obvious, which is a rational rebound in a short period of time.
According to the monitoring data of Zhongyu Information, after ethylene glycol officially opened the downward channel in early February, it began to fall from the highest level of 8,280 yuan/ton this year until it fell to the spot price of 6,550 yuan/ton on March 8, a drop of 1,730 yuan/ton. tons, ethylene glycol is in a deep decline trend at the turn of February and March. As the bearish sentiment in the market increased, major demand sides such as downstream polyester and UPR did not actively purchase, but maintained a cautious wait-and-see attitude in early March. In particular, the sales of the polyester industry were hindered from February to March. The average weekly polyester production capacity is 79%, while the average production and sales are 60-80%.
In addition, throughout February, during the decline of ethylene glycol, the related product PTA has maintained a narrow range of 5,300-5,500 yuan/ton. One of the two major raw materials in the polyester industry is in a downward channel, and the other is fluctuating at a high level. Therefore, in February and March, this period is not suitable for raw material procurement. Turning to March, starting from the second week of March, PTA entered a plummeting mode. The futures dropped from 5400 to around 5000 points in the short term. During the same period, ethylene glycol shorts were covered, and the ethylene glycol market bottomed out. , for downstream polyester from the second week of March to this time period, the two major raw materials PTA and ethylene glycol are at cycle turning points, and spot purchases may have incremental releases. However, according to Zhongyu Information’s understanding of the situation from the downstream, B The purchasing situation of glycol is not optimistic, mainly because there is resistance to the sales of downstream polyester and the inventory is difficult to digest. Therefore, the buying interest of downstream polyester towards the current ethylene glycol price has not increased much.
In March, the factors affecting ethylene glycol funds are still bearish. The domestic two sessions will end in mid-March. At the same time, the US dollar interest rate hike meeting is on the agenda. The interest rate hike has basically been hammered down, and domestic capital outflows may accelerate. Crude oil showed weakness in the second week of March. Affected by high inventories, oil prices have fallen below US$50/barrel, which will increase the pressure on the bulk chemical market in the future. Analysis predicts that the rebound of ethylene glycol will slightly boost the market atmosphere in the short term, but the futures price of 7,000 points is still a watershed. Whether it can stand firm at 7,000 points will play a decisive role in revealing the market outlook in late March, but at present, it seems The fundamentals lack favorable conditions, and the external environmental factors are bearish. Ethylene glycol may still fall back and fluctuate for some time in the future.
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