New Year Increase Or Break The Balance Between Supply And Demand, High Inventory, Low Prices Into Ethylene Glycol Market Norm.

New development of Hengli 1 million 800 thousand ton / year ethylene glycol project: project land management construction starts

According to the forum of petro chemical industry, in February 24th, the first ground pipe of Hengli Petrochemical (Dalian) Chemical Co., Ltd., which was built by the ten construction company of refinery and chemical engineering company, was installed in 1 million 800 thousand tons / year ethylene glycol project, marking the opening of the underground pipeline network of the project.

It is understood that in February 28, 2018, Hengli Limited by Share Ltd issued a notice to make full use of Hengli refinery's "20 million ton / year refining and chemical integration" project by-product to maximize the advantages of refining and chemical integration. The company's wholly-owned subsidiary Hengli Petrochemical (Dalian) Chemical Co., Ltd. intends to build 1 million 500 thousand tons / year ethylene project in Hengli Petrochemical Industrial Park, Changxing Island, Dalian.

Public information shows that the scale of the project is 1 million 500 thousand tons / year of steam cracking and 12 sets of upstream and downstream facilities, including two sets of ethylene glycol (EG) units with a single line scale of 900 thousand tons / year, and the total capacity of ethylene glycol (EG) is 1 million 800 thousand tons / year.

In September 2nd of the same year, the 1 million 800 thousand ton / year ethylene glycol project of Hengli Petrochemical (Dalian) Chemical Co., Ltd., which was built by ten refinery and chemical engineering company, was started.

The project is scheduled to be implemented in September 30, 2019.

The following advantages of the project will enable it to become a strong competitor in the rapidly developing ethylene glycol industry.

1, the single line scale is large and the scale effect is good.

Its ethylene glycol (EG) device has a nominal size of 900 thousand tons / year ethylene glycol (EG) (a product) and a total of two lines.

2, integration advantages.

In December 2015, Hengli 20 million ton / year refining and chemical integration project (including 4 million 500 thousand tons / year PX) is now entering the peak period of construction, and has been officially put into production at the end of 2018.

Ethylene glycol production capacity and PX-PTA production capacity can be matched in the near future to reduce pportation costs.

Two aircraft carrier devices are expected to supply 1 million 450 thousand tons in the first quarter, and the world's ethylene glycol capacity will be expanded.

In the 1-2 month of 2019, the world's ethylene glycol production capacity expansion was prelude to the commissioning of ethylene glycol with an annual output of 700 thousand tons in the United States, and the launch of qualified products. At present, the ethylene glycol plant with an annual output of 750 thousand tons in Malaysia is ahead of schedule. Two aircraft carrier devices are expected to be supplied normally in the first quarter, involving 1 million 450 thousand tons of capacity.

Ethylene glycol is one of the main raw materials for the production of polyester products. Its proportion in the cost of polyester raw materials is only inferior to that of PTA (one ton of polyester products consumes about 0.335 tons of ethylene glycol). Unlike PTA, MEG has relied heavily on imports, and its dependence on imports in 2017 is still around 60%.

Supply and demand balance of ethylene glycol in 2013-2017 years

Globally, large enterprises producing ethylene glycol are mostly large foreign enterprises with "tall and big". It can be said that ethylene glycol has long been a "short board" of China's polyester industry chain.

Global five largest producer of ethylene glycol

Ethylene glycol market under "capacity of heaven" capacity: 18 year high drop 36%!

In 2015, in the four years of -2018, ethylene glycol production and output in the world showed steady growth.

In terms of capacity, it was 28 million 500 thousand tons in 2015, 31 million 630 thousand tons in 2016, and 34 million 130 thousand tons in 2018, the fastest growing year in 2018, and 2 million 500 thousand tons in 2017, an increase of 7.9%. The rapid increase in the capacity of the coal industry was mainly due to the rapid growth of China's coal based ethylene glycol. In the year, the production of 1 million 620 thousand tons of ethylene glycol in China was put into operation, and another set of petroleum grade ethylene glycol plant was put into operation. The new capacity of China's crude oil reached 2 million 20 thousand tons. At the end of the year, it reached a stable state of operation, and China's new capacity accounted for more than 80% of the world's new increase in production in the year of 2016.

In terms of output, with the rapid growth of production capacity, output also showed corresponding growth. In 2015, the world output was 24 million 500 thousand tons, in 2016, 25 million 820 thousand tons in 2017 were 27 million 500 thousand tons, in 2018 reached 29 million 500 thousand tons, during the four years, the global output increased 5 million tons, an increase of 20.4%, an average annual increase of 5%, of which 2018 increased the largest, reaching 7%.

The production of "Tian Liang" capacity has caused an important blow to the ethylene glycol market. Since mid April 2018, the price of domestic glycol has gone down all the way, from a high level of 8600 yuan / ton to nearly 5500 yuan / ton.

After the Spring Festival, ethylene glycol reappears "open door black", many sets of aircraft carrier devices are planned to go into operation, or will break the balance between supply and demand.

In 2019, for the ethylene glycol market, the "open door black" appeared: the main port stock hit a new high in recent years, crude oil and chemical industry market rose sharply, and it was difficult to pull ethylene glycol out of the mire. The ethylene glycol of each process was faced with unprecedented cost end pressure. The profit of coal, methanol and ethylene processing was negative for a long time, and the profit level of naphtha natural gas also reached a new low in recent years.

The reason why ethylene glycol is so weak at present is the change of supply and demand pattern: from the surface, it is the main port stock that continues to grow. The fundamental reason is that the change in the supply pattern of ethylene in 2019 resulted in the continuous accumulation of the main port stock due to the rapid growth of China's glycol production last year. In 2018, China's ethylene glycol production capacity increased by 2 million 20 thousand tons, and the new capacity was calculated at 8 per month, with an additional supply of 1 million 600 thousand tons per month.

In 2019, the growth rate of production capacity can be increased with the increase in volume. In 2019, it is not only a year of rapid growth in China's capacity, but also a year of rapid growth in Asia and the United States.

At present, a set of annual output of 700 thousand tons of equipment has been put into operation in the United States, and qualified products have been delivered to Asia. In addition, a set of 750 thousand tons of Malaysia petroleum has entered the commissioning phase ahead of schedule. However, China's Zhejiang Petrochemical (annual output of 800 thousand tons), Hengli Petrochemical (annual output of 1 million 800 thousand tons), and South America 2 line (800 thousand tons) and other sets of ethylene glycol aircraft carrier units have been put into operation in 2019. With the addition of some Chinese coal installations, the world is expected to have 7 million tons of new capacity planned for production in 19 years, 2 times in 2018.

This supply situation will break the long-term supply and demand balance of ethylene glycol and turn into overcapacity. Therefore, the relatively high inventory and relatively low price will become the normal market of ethylene glycol at present.