Demand Is Difficult To Sustain. Glycol Lacks Momentum.

Last week, the domestic ethylene glycol market fluctuated at a low level, and the two sides were in a stalemate. The East China spot closed at 4275 yuan / ton.

Although the polyester terminal load has picked up, businesses are worried that demand side is unsustainable and market sentiment is pessimistic.

Short term support of raw material is effective.

Last Thursday, oil tankers were hit by a 4.5% rise in oil prices, ending the decline in crude oil demand in recent weeks as a result of global concerns. In addition, in the case of limited processing profit compression of ethylene glycol, the sensitivity of short term and oil price trend is rising, and short-term support continues to be effective. But the trend of oil price fluctuates greatly, and after the hype goes down, if the oil price rebound is difficult to sustain, ethylene glycol may follow or fall.

The supply side is still relatively adequate.

By the end of June 13th, the average load of ethylene glycol in China was about 63.96%, of which the start-up load of ethylene glycol was about 73.63%, and the weekly output was about 100 thousand tons. The load of coal glycol production was about 49.97%, and the weekly output was about 47 thousand tons. At present, many ethylene glycol units are almost in a state of loss. The price of ethylene glycol futures is essentially a test of cash flow from manufacturers. When the cash flow of manufacturers is difficult to sustain or problems arise, maintenance will usually increase.

But at present, there are not many new maintenance devices in China recently, and the pre maintenance equipment is expected to resume production. Under strong maintenance, port inventory pressure is still difficult to resolve. The direction of the current stalemate is to be resolved, and a more large-scale device maintenance plan at the supply side is needed.

Demand side is difficult to form positive.

Because the price of raw materials has been in a slow downward trend, the downstream weaving factories are generally cautious about raw material procurement, and their enthusiasm for stock preparation is not high, mostly on demand. Terminal demand performance is not good, weaving manufacturers turnover dropped inventory increased, after the Dragon Boat Festival polyester filament production or sale is difficult to continue, polyester factories around the profit and loss line, facing the problem of poor demand spanmission, recent low polyester operation rate dropped to 87%, lower than 91.5% in early May, for ethylene glycol rigid demand for raw materials has declined.

To sum up, ethylene glycol is in a low price area and the contradiction between supply and demand is easing. However, polyester production and marketing are short of sustainability. The expectation of demand side is pessimistic, and the market lacks momentum. Short term ethylene glycol market is weak and volatile. (source: Founder metaphase, Guo Ye net)