Price trend

According to the monitoring data of SunSirs, as of December 13, 2022, the domestic market price of diethylene glycol was 5,916.67 RMB/ton. Compared with January 1, 2022 (the reference price of diethylene glycol was 5,016.67 RMB/ton), the price increased by 900 RMB/ton, or 19.60%.

It can be seen from the data monitoring of SunSirs that the diethylene glycol market in 2022 mainly showed a narrow range fluctuation trend from January to May, and then there was two more obvious rises from the middle of May. From May 11 (the reference price of diethylene glycol was 4,900 RMB/ton) to August 20 (the reference price of diethylene glycol was 4,830 RMB/ton), the first round of market saw a relatively obvious rise and then slowly fell back, which took about three and a half months, with the peak appearing on July 10 (the reference price of diethylene glycol was 5,516.67 RMB/ton). The second round of the market started to rise from the low point in late August (the reference price of diethylene glycol was 4,830 RMB/ton) until the end of November and the beginning of December (the reference price of diethylene glycol was 6,133.33 RMB/ton, the high price in 2022), and then began to dip back.

In the first stage, from January to May of 2022, the domestic diethylene glycol market maintained a range fluctuation trend. The international crude oil surged and fell, the port inventory continued to be high, and the downstream demand was weak. Under the influence of multiple factors, the market maintained a volatile trend. After returning from the Spring Festival holiday in February, the arrival of imported cargoes at the port was delayed irregularly, and the inventory at the port was gradually accumulated. Since the middle of March, the domestic epidemic had been severe. Under the logistics control policy, the port delivery was not smooth, and the inventory continued to accumulate. The inventory of East China's main ports fluctuated between 55,000 tons and 75,000 tons. On April 23, the inventory reached 78,600 tons, a new high in the year. The downstream market recovered slowly and the demand performance was poor. At the end of the spring holiday in February, the starting time of some UPR plants was delayed, and the comprehensive starting level was low. Affected by the epidemic, the workers' return to work was delayed and the logistics and transportation were not smooth, the factory's raw material procurement and shipment were blocked, the downstream and terminal follow-up were poor, and the demand performance was weak. At the same time, affected by COVID-19, the polyester industry started at a low level, and the use of diethylene glycol was less than expected.

In the second stage, from mid May to mid August, the domestic diethylene glycol market rose and then fell back. With the tight supply of global crude oil leading to an overall increase in international oil prices, the cost support was strong, the domestic unit load was reduced, the output was reduced, the port shipment was good, and the inventory was reduced. Although the downstream industry started at a low level and the demand side performed generally, under the influence of the bullish bulls, diethylene glycol started to run warmer until the first ten days of July, and the domestic market price of diethylene glycol rose by 616.67 RMB/ton, or 12.59%. The port shipment was good, the shipment volume was increased, the port inventory was slightly reduced, the inventory of the main port in East China was reduced from 72,500 tons to 49,500 tons, and the domestic Far East Lianhua, Yangzi Petrochemical, Maoming Petrochemical, Shanghai Petrochemical, Sinopec and other manufacturers’ plants were shut down for maintenance in May June, with the output decreased, and the overall supply was tight. However, in the middle of July, the Federal Reserve sharply raised interest rates and superimposed the global economic recession, the crude oil price fell in shock, the cost support weakened, and the focus of the UPR market fell. With the continuous decline of other raw material prices, the UPR market continued to decline, leading to the continuous decline of the overall construction of the UPR industry and limited demand for raw materials. The cost support was insufficient and the demand was limited. The price of diethylene glycol declined slowly, falling by 686.67 RMB/ton or 12.45% as of August 20. All the previous gains were reversed.

In the third stage, from late August to the end of November and early December, the domestic diethylene glycol market soared and rose against the trend. OPEC+ decided to significantly reduce production, which supported oil prices again due to market supply concerns. The international crude oil price rose as a whole, the cost support was relatively strong, the port shipment was good, and the inventory was low. Affected by ethylene glycol, a brother industry, the starting load of enterprises was not high, the domestic production supply was reduced, the downstream starting resumed, and the demand was good. Under the influence of multiple factors, diethylene glycol began to run relatively strongly. With the gradual cooling of the weather and the gradual lifting of power restrictions, the off-season of UPR market gradually ended, and the commencement of work continued to resume. UPR prices continued to rise. UPR shipments were better under the market mentality of buying up rather than buying down, and the shipment of diethylene glycol was warmer. During the Mid Autumn Festival and the National Day in China, the downstream manufacturers had a considerable stock of goods before the two festivals, and the port realized rapid warehousing. After the return of the National Day, the domestic diethylene glycol market had maintained a tight supply and rising prices, the port achieved periodic de stocking. As of October 31, 2022, the inventory of ports in East China is about 18900 tons, down 42,600 tons or 68.76% from 60,500 tons on August 22. The number of ships entering the port in East China was relatively small, and the sales volume was basically more than the unloading volume. The port inventory had been at a low level. As of November 28, 2022, the port inventory in East China was about 20,000 tons. The port inventory was low and the supply was tight.

In the fourth stage, in December, the domestic diethylene glycol market continued to dip. The cost side support was weak, the demand performance was poor, the supply side support was average, and the diethylene glycol market was weak. The stock of oil products in the United States increased significantly, and the Federal Reserve continued its aggressive interest rate increase policy, resulted in a sharp drop in crude oil futures prices, and cost support was weakened. One unit in Maoming was restarted, the domestic production and supply increased slightly, the market transaction was average, the wait-and-see mood of the operators became stronger, the shipment in the reservoir area fell back, the port unloading inventory increased significantly, the port inventory in South China was on the high side, and the supply side performance was poor. The operating rate of UPR industry was low, the market inventory was slowly digested, and most of the goods were shipped along with the line. The demand side of diethylene glycol performed poorly.

Market outlook

At present, the port has accumulated stocks. The market is worried about the increase of supply, and the demand expectation is gradually weakening. The overall market sentiment is not high, and the industry is cautious. The market has no good news guidance for the time being. The diethylene glycol data engineer of SunSirs believed that in the short term, the diethylene glycol market will be adjusted to be weak and the prices continue to decline. More attention should be paid to the terminal shipments and subsequent arrivals.

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