In early August, with the commissioning of several new units and the restart of preliminary maintenance equipment, the ethylene glycol market changed direction. In the past two weeks, the ethylene glycol spot and futures markets have experienced sharp declines. Among them, the main contract of ethylene glycol futures fell from 5,500 yuan/ton to 4,900 yuan/ton, a decrease of 600 yuan/ton. In the spot market, the spot price of ethylene glycol fell from the highest point of 5,510 yuan/ton to 5,030 yuan/ton, a drop of nearly 500 yuan/ton.
“The recent weak performance of ethylene glycol is determined by both cost and supply and demand reasons. Zhu Lihang, an analyst at Zheshang Futures, believes that on the one hand, international oil prices at the cost end have continued to fall, and chemical industry Segment varieties are running weakly; on the other hand, the downstream polyester industry has begun to jointly reduce production due to high inventories, and the demand side has dropped significantly. New equipment such as Gulei Petrochemical on the supply side has been put into operation smoothly and will start output immediately, triggering market concerns about future oversupply. Worry.
Dadi Futures analyst Jiang Shuopeng told reporters that from the demand side, the joint production cuts by major polyester manufacturers and the weakening of terminal demand month-on-month are the main factors affecting the recent impact of ethylene glycol. The key factors for the decline. Terminal demand exceeded peak season expectations ahead of schedule, new orders were insufficient after August, finished product inventories of weaving companies were high, and loom starts fell month-on-month.
Hongye Futures Analyst Zhang Yongge also believes that in the past month, polyester filament inventories have increased significantly, and the cash flow of various products has also been poor. Polyester manufacturers have started to shut down operations for maintenance, and the average load has dropped by around 5%, worsening MEG’s situation. The supply and demand pattern has accelerated the downward trend of the raw material market.
In the entire polyester industry chain, compared to PTA and staple fiber, there are several sets of ethylene glycol equipment that will be installed this year. Production will be gradually put into operation in the third and fourth quarters. “Since 2021, a total of more than 5 million tons of new production capacity has been gradually released. “Zhang Yongge said that the integrated new production capacity has a total of 4.1 million tons, accounting for a relatively large proportion. In August, Fujian Gulei and Guangxi Huayi’s 900,000-ton installations were put into operation, and Shenhua Yulin and Xinjiang Guanghui will also be in operation. It will start operation in September. In addition, the recently restarted units include Sichuan Petrochemical 400,000 tons, Jiangsu Sierbon 40,000 tons, Xinjiang Tianye 200,000 tons, Xinjiang Tianying 150,000 tons, etc.
As of this week, the operating load of coal-based MEG has reached 42.66%, and the operating load of ethylene process equipment has reached 76.06%, up 2.04% and 3.58% respectively from the end of July. The supply-side production has increased significantly.
Judging from the future maintenance plan, the expectation of ethylene glycol accumulation is relatively clear. Before the decline, there were profits in both oil and coal-based processes, which also gave ethylene glycol a sufficient fall. Space. “Once the supply and demand situation weakens, the cost side begins to weaken, and the price decline will be larger. “Zhu Lihang said.
Looking forward to the market outlook, Jiang Shuopeng believes that on the one hand, if the price of crude oil on the cost side can stop falling and stabilize, and the overseas epidemic situation gradually improves, the cost side of ethylene glycol will still gain Support; on the other hand, the terminal weaving link is currently weakening month-on-month, and there will still be a new round of rigid demand for inventory replenishment in the later period. After new orders pick up, positive feedback will be formed again for the industrial chain, and a new round of driving force will be generated for ethylene glycol prices.
In Zhang Yongge’s view, after the sharp decline, the short sentiment of ethylene glycol has been vented, and the decline may have eased, but the short-term market supply and demand situation is still difficult to improve. The market may remain weak.</p
