Inhibition Of Ethylene Glycol Will Continue To Fall.

The polyester industry in the lower reaches has a high starting point and a rigid demand is stable, while domestic ethylene glycol enterprises have a high operating rate, port inventory is high, the market situation is oversupply, and the short-term behavior of the capital side is difficult to change the present situation, and the market price of ethylene glycol will continue to fall.

Downstream polyester demand

By the week of April 12th, the average operating rate of the polyester industry was 90.97%. After the 200 thousand unit was put into operation, the technology of polyester production was revised to 55 million 850 thousand tons. According to this calculation, the daily demand is about 47 thousand and 300 tons. According to the current glycol start up, the daily supply is 26 thousand tons left and right, the import is estimated at 25 thousand tons, the overall supply is about 51 thousand tons, and the supply is over 3 thousand and 700 tons (no antifreeze and unsaturated resin demand).

Ethylene glycol supply

Figure 1 Comparison chart of ethylene glycol production in China

Source: lung Chung

Enterprises: As of the week of April 12th, ethylene glycol week started 73.57%, +3.15% per annulus, and 179 thousand and 900 tons per week. Among them, the oil production line started 80.84% per week, the ratio was flat, the weekly output was 110 thousand and 200 tons, and the coal route started 74.81% per week, +5.94% and 69 thousand and 900 tons per week.

Figure 2 Comparison chart of domestic ethylene glycol port inventory

Source: lung Chung

Hong Kong Deposit: As of April 11th, the MEG port in East China's main port area has a stock of about 1 million 282 thousand tons, an increase of 47 thousand tons compared with last Thursday. Among them, 91.7 tons in Zhangjiagang, an increase of 12 thousand tons per annulus, a daily average delivery of some 7090 tons of a mainstream warehouse, 81 thousand tons of Ningbo, an increase of 11 thousand tons per annulus, 125 thousand tons of Shanghai and Changshu, an increase of 22 thousand tons per annulus, 117 thousand tons of Taicang, an increase of 1 thousand tons per annulus, and an average daily delivery of about 3000 tons in the mainstream reservoir area; 42 thousand tons in Jiangyin, an increase of 1 thousand tons in the ring. In addition, the total area of the port area for statistics is about 1400000 tons.

Pre arrival port It is estimated that the eastern port of Zhangjiagang is expected to reach 272 thousand tons this week, of which 139 thousand tons are planned for Taicang, 54 thousand tons for the Taicang port, 64 thousand tons for Jiangyin, 15 thousand tons for Jiangyin, and 0 tons for Shanghai.

Cost and mentality of coal enterprises

Through coal enterprises visit, understand that the cost of coal to ethylene glycol is between 4300-4500 yuan / ton, individual or lower, 70% + contract orders, do not want to lose market share, small profits and quick turnover, as long as cheaper than oil to make ethylene glycol, plus the profit of by-products, coal enterprises can still support.

Conclusion: Although the demand for downstream polyester is good, but ethylene glycol started high, port inventory explosion, the overall oversupply, coupled with the company said that further down could support a situation, ethylene glycol futures fell 31 yuan / ton within days, the spot market broke 4700 yuan / ton, the short term to see the downward trend continued, the space was 200 yuan / ton.