Ethylene glycol prices began to rebound and stopped falling

In August, the price of ethylene glycol began to rebound and stopped falling. According to data from SunSirs, as of August 22, the average price of domestic oil to ethylene glycol was 4,585 RMB/ton, an increase of 0.26% from the beginning of the week. The prices in each region were as follows:

The spot price range for mainstream manufacturers in East China was 4,600-4,900 RMB/ton; The spot price of ethylene glycol in the South China market was 4,550 RMB/ton, and the mainstream manufacturers in Central China had a spot price range of 4,550 RMB/ton for external execution.

The basis of the spot contract for ethylene glycol at the port on August 22, 2024 was close to low and far from high. The basis quotation for the 09 contract this week was +43 to +47; The basis of forward contracts was relatively strong, with a basis price of 70-74 RMB/ton in September. As of August 22nd, the basis price for the 01 contract had started to be quoted, and the basis price for September was 0-4 RMB/ton.

On August 21, 2024, the external price of ethylene glycol was as follows: the landed price in China was 553 US dollars/ton, and the landed price in Southeast Asia was 550 US dollars/ton. The domestic landed price had slightly increased.

Reasons for the rebound in ethylene glycol prices this week:

1. Digestion of the expected rebound in port inventory in the early stage

The mid month market had sufficient expectations for the expected increase in port arrival volume, and the expected accumulation of trading inventory in the early stages of the market led to a decline in prices. Recently, there had been some reflection in inventory data. On August 22, 2024, the total spot inventory of ethylene glycol in the main port of East China was 681,200 tons, an increase of 66,300 tons from the total spot inventory of ethylene glycol in the main port of East China on August 15, which was 614,900 tons. The expectation of subsequent imports arriving at the port has weakened, and the negative effects brought by concentrated arrivals had been digested in the early stage.

2. The supply-demand situation had improved

On the demand side, downstream demand is expected to be strong during the peak season, with the turning point of the golden September and silver October peak season, and downstream operating rates are expected to improve. On the supply side, there was a favorable price difference for the conversion to EO, and there was a strong expectation for some ethylene glycol production capacity to be converted.

The ethylene glycol plant dynamics in August

In terms of coal production equipment, two sets of 40W units in Yongcheng, Henan Province had been shut down starting from recently; Yangmei Shouyang 200,000 recently stopped due to unforeseen circumstances; Shenhua Yulin 40W units was undergoing maintenance and parking;

The line of Inner Mongolia Yankuang with a capacity of 400,000 tons was temporarily in operation, while the other line would be restarted in the near future; Shanxi Woneng 300,000 would be restarted; Guanghui stopped for maintenance around June 26th. As of August 22nd, one line had been restarted and was operating at full capacity, while the other line was being restarted.

In terms of overseas installations, a 39W unit in Saudi Arabia was undergoing maintenance and shutdown; A set of 83W equipment in South Asia, USA, had recently been shut down for maintenance due to unforeseen circumstances, and the restart time was yet to be determined; A 75W plant in Malaysia had recently restarted.

Market outlook

As of August 22nd, the absolute amount of explicit inventory in ports was still relatively low. Although there had been a slight accumulation of inventory recently, there was not much room for inventory to continue to rise. The main considerations were as follows:

1. Polyester production was recovering, with active procurement at low prices;

2. The overseas supply had been weak, mainly due to the relatively concentrated arrival of contracted goods at the port in the second half of August. However, since September, there will a shortage of external shipments of ethylene glycol, mainly due to the shutdown of some facilities in Saudi Arabia due to gas shortage since mid to late July, resulting in a significant reduction in Saudi supply;

Therefore, in the short term, ethylene glycol prices are mainly fluctuating, and there will be support for ethylene glycol prices in the future.

If you have any questions, please feel free to contact SunSirs with support@SunSirs.com.