Market Participants: Ethylene Glycol Prices Lack Of Reverse Power

In February 28th, the ethylene glycol industry forum sponsored by DAC and Guotai Junan Futures was held in Shanghai.

Participants said that the market of ethylene glycol will soon usher in the traditional "golden three silver four", and the price will rebound.

But in the medium to long term, external demand or lack of continuity are superimposed by supply pressure from long-term ethylene glycol production, and ethylene glycol is lacking in momentum during the year.

According to Guotai Junan Futures glycol researcher relaxation, since the December 10, 2018 ethylene glycol futures market, the overall price showed a downward trend, rebounded slightly.

The emergence of such a market is mainly due to some problems in demand before, and the middle rebound is the speculative demand driven by the rise in crude oil prices.

In recent years, with the easing of Sino US trade frictions, the demand for ethylene glycol has improved somewhat, and the pressure of oversupply has weakened.

He believes that in the short term, the price of ethylene glycol has the possibility of upward. "Gold three silver four" is expected or will be fulfilled.

As for the medium and long term prices, the domestic demand for ethylene glycol is generally stable in terms of relaxation. However, there is a big uncertainty in external demand, which adds pressure on the supply of new ethylene glycol.

Under such circumstances, he believes that ethylene glycol futures operation may lack the trend of opportunity this year, the long direction can only be operated in the short term when there is a margin of safety, and the short operation will be the mainstream of the whole year.

As for the operation of arbitrage, Zhang said that ethylene glycol is usually used for arbitrage with PTA, and buying PTA and empty glycol in 2019 will still be a better strategy, but the price trend of PX should be paid attention to, which may become the risk point of the strategy.

In addition, if the price difference is appropriate, it will be a good choice to buy spot and empty futures without risk.

In the monthly arbitrage operation, he suggested to do more EG1909 and short EG1906. The biggest price difference may be the cost of the toss.

According to the relevant staff of the big business office, as of the end of February, a total of 7 million 645 thousand hands of ethylene Futures (Dan Bian), the average daily turnover of 159 thousand hands, average daily positions of 127 thousand hands.

Since the listing of glycol futures in DCE, the spot price trend is basically the same.

The futures price of ethylene glycol has reached 0.922 relative to the spot price of ethylene glycol products in East China's Zhangjiagang.

The good ethylene glycol futures provide a new hedge for industrial customers.

Futures Daily reporter learned that as of the end of February, the number of customers who participate in ethylene glycol futures trading has exceeded 70 thousand, including 1539 legal customers and 72355 individual customers.

Among them, the average daily position of corporate clients has reached 46.6%, and the average daily turnover is 19.8%.

The middle and lower reaches of the industrial chain are involved in the futures trading of ethylene glycol. The function of ethylene glycol futures service industry chain and the service of the real economy has already appeared.