Will The Ethylene Glycol Market Rise After The Spring Festival

As of January 30, the negotiated price of ethylene glycol market was around 5035 yuan/ton. There was still a little profit for petroleum to ethylene glycol, while coal to ethylene glycol has been losing money. Fundamentals have been weak for more than a month, not to mention the Spring Festival holiday. Everyone is concerned about whether the ethylene glycol market will rise after the holiday. Let's make a small analysis below.

1. Supply side (increased supply of domestic enterprises)

As of the 30th, the operating rate of ethylene glycol plant in China is 81%, and that of coal to glycol plant is 74%; Domestic supply remained stable; However, the 380000 ton ethylene glycol unit of Sanjiang Petrochemical will return to normal in the next few days after it is put into commissioning today. At that time, the ethylene to ethylene glycol operating rate will rise to 84%, the daily supply will increase by about 1000 tons, and the overall supply will increase significantly to 26500 tons.

2. Supply side (port inventory is accumulated)

By the 30th, MEG port inventory in the main port area of East China was about 924000 tons, an increase of 31000 tons compared with the previous period. Among them, Zhangjiagang was 60.7 tons, an increase of 32000 tons over the previous period; Ningbo 65000 tons, 12000 tons lower than the previous period; Shanghai and Jiaxing were 28000 tons, down 5000 tons from the previous period; Taicang and Changshu 138000 tons, an increase of 3000 tons over the previous period; Jiangyin and Changzhou have 86000 tons, 13000 tons more than the previous period. It is estimated that in the short term, the East China port will arrive with about 251000 tons of cargo, and the port inventory will be accumulated.

3. Demand side (demand decreases significantly)

At present, the polyester production reduction in January is estimated to be about 10.47 million tons, and the shutdown production reduction capacity in January and February is about 11.4 million tons, accounting for about 20.8% of the current production base of 55 million tons. Since last week, the high inventory of polyester in the downstream has declined significantly, and some small and medium-sized polyester enterprises even have zero inventory or lack of inventory. In the case of low demand for end weaving holidays, polyester profit performance is fair, and polyester enterprises may delay or cancel maintenance plans in the later period.

Conclusion: With the increase of supply and the decrease of demand, how will the ethylene glycol market go next? Considering the Spring Festival holiday, there is no demand in the market. After the holiday comes back, the recruitment of terminal enterprises is a problem. If there is manpower, the enterprise will start to work again; The problem is the cost of raw materials. With the recent rise of crude oil, ethylene glycol raw materials will surely follow the upward trend. The cost increase and the limited demand gap will help ethylene glycol complete the periodic bottoming, and there will be a wave of recovery.

Ps： What do you think of 2019 in the long run? Let's talk about it later



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