Ethylene glycol price bottom support strengthened
According to the data of SunSirs, the average price of domestic ethylene glycol produced from oil was 4,058.33 RMB/ton on December 20, basically unchanged from the previous trading day. In terms of futures, the main contract eg2301 on the 20th closed at 4,080 RMB/ton, up 0.27%.
Analysis review
On December 20, the spot price of ethylene glycol in the East China market was basically stable, and the spot external executive price of mainstream manufacturers in East China remained at 4,100 RMB/ton; At the trade flow end, the spot negotiation price in Zhangjiagang market slightly loosened. The spot negotiation price was around 4,045 RMB/ton that week, and the forward spot contract was about 4,055 RMB/ton in January.
Recently, the market has stopped falling and stabilized, and the price has improved slightly, mainly based on the following factors:
Supply side
- Supply side: Unplanned maintenance of ethylene glycol unit increased due to large loss of domestic production profits. As of the 20th, the overall operating rate remained low, while overseas operations were also low under the influence of poor efficiency. According to statistics, as of December 15, the overall starting load of ethylene glycol in China was 56.00%, down 0.12% compared with the previous period, of which the starting load of ethylene glycol produced from coal was 38.56%, down 0.77% compared with the previous period.
- Inventory: The port inventory rebounded. The MEG port inventory in the main port area of East China was about 980,000 tons, an increase of 19,000 tons month on month.
- Strengthened cost support: the price of ethylene glycol fell to a low level. The price of ethylene glycol was relatively low, domestic manufacturers had serious losses and had strong mentality to support price.
- Periodic recovery of downstream demand: terminal orders increased in December, production and sales of polyester fiber improved, and inventory of polyester manufacturers decreased. The demand for goods stock in the early and middle of December was good.
The main reasons for the lack of space were:
- Inventory: The port inventory rebounded. The MEG port inventory in the main port area of East China was about 980,000 tons, an increase of 19,000 tons month on month.
- Downstream operating rate is expected to move down periodically: with the approaching holiday, coupled with public health factors, the terminal weaving factory will reduce production to operate. The operating load of polyester is not high, and the demand for ethylene glycol may be relatively low.
- New production capacity is expected to be strong: the medium and long term ethylene glycol production capacity is under great pressure.
Market outlook
At present, the downstream is basically in the state of digesting the stock in the early and middle of December. The atmosphere of purchasing in the market is light. From the perspective of demand side fundamentals, terminal orders have increased, polyester production and sales have improved, and polyester manufacturers' stocks have decreased, which supports the prices of ethylene glycol to stop falling and move up; However, with the approaching Spring Festival superimposed with Omikjon factors, the downstream operating rate is expected to move downward periodically; On the supply side, although the operating rate of ethylene glycol is low, the port inventory has rebounded, and the pressure on the production of new ethylene glycol production capacity in the medium and long term is large, the price of ethylene glycol is lacking momentum to rise.
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