Supply Pressure Is Slowing Down. Can Glycol Market Get Warmer In The Near Future?

In recent years, the domestic ethylene glycol market is weak and concussion, and the international crude oil continues to run strong. However, glycol market is weak under the pressure of excess supply, and high inventory consumption is slow.

There is a lack of confidence among the market participants. In the east of China, the large single spot talks this week are close to 4630 yuan / ton. The downstream polyester enterprises have certain demand for stocking before the holiday. This week, we anticipate that we will reduce the inventory in advance. We expect that the market will be abundant, and the market will still be in short supply. Can the glycol market get warmer in the near future?

Stocks dropped slightly, and market pessimism eased slightly.

As of April 18th, the total inventory of ethylene glycol in East China's main port was 1 million 277 thousand tons, down 7 thousand tons.

Among them, 893 thousand tons in Zhangjiagang, 48 thousand tons in Jiangyin, 127 thousand tons in Taicang, 89 thousand tons in Ningbo, 120 thousand tons in Shanghai and Changshu.

Main port shipment: Zhangjiagang direction near main port daily delivery 8900 tons nearby; Taicang direction main port daily delivery 5500 tons; Ningbo direction main port daily average delivery 6000 tons nearby.

In from April 18th to 24th, the total volume of ethylene glycol to the ship in East China's main port was 192 thousand and 900 tons, down 33 thousand and 100 tons.

Ethylene glycol port inventory dropped slightly, the market pessimism eased slightly, but the inventory pressure is still larger. Considering the recent decline of ethylene glycol, the superposition of next week's port plan has dropped somewhat, inventory or destorability trend, ethylene glycol slightly rebounded, but it is suppressed by high inventory, and the rebound space is limited.

Manufacturer's profit is damaged, supply side or continuous shrinkage.

Affected by the trend of low price of ethylene glycol, factory profits were damaged to varying degrees.

At present, the profits of naphtha integrated enterprises are about -103 yuan / ton; the profits of MTO installations are about -1746 yuan / ton; the profit of coal enterprises is about 299 yuan / ton.

At present, the loss level of enterprises is increasing. However, the situation is different for every enterprise, and the reduction of load is not based on the consideration of ensuring market share.

The mitigation of MEG's excess supply and demand pressure may only rely on the weak state of price and profit, forcing the supply side to continue to shrink.

According to statistics, the total production capacity of the coal enterprises currently under repair is 1 million 190 thousand tons, and the coal enterprise's start-up rate is 70.43%.

By the end of April 22nd, the planned production capacity of coal to ethylene glycol is 1 million 530 thousand tons, and the operating rate of coal enterprises will be reduced from 70.43% to 59% at present.

Supply side contraction will increase the ethylene glycol market.

To sum up, at present, the high storage of ethylene glycol is still holding up the rising space. Downstream polyester enterprises may have a certain demand for stocking before May 1, and there are also expected downloads in the port. In the profit loss of the supply side, the overhaul of domestic enterprises will increase significantly. In the short term, the MEG price is relatively strong, and there is limited space for continuous downlink.

(source: long Zhong information, China International Futures)