Ethylene Glycol: When The Bear Market Is Going On, MEG Is Losing Heart.

Recently, the domestic ethylene glycol market has been hovering around the 4300 yuan / ton line. With the slight improvement of demand side, the market trend is strong, and the two trading days in the week have been narrowing upward. But the trading atmosphere is still stalemate. The market participants are cautious about the low price market. Under the pressure of high inventory pressure, there is still a lack of optimistic expectations, and there is a lack of confidence in the long-term supply structure.

Recently, the domestic ethylene glycol start-up load has recovered smoothly, and the new maintenance equipment is limited. Only a 120 thousand ton / year MEG plant in Maoming petrochemical company has been revamping in June 18th. It is expected that the parking time will be in the vicinity of half a month, while some parts of the pre maintenance device are expected to restart and restore. The cash flow cost of coal glycol has been tested in the market in the past, and the cash flow from the coal chemical industry can be directly returned to about 3800-4000 yuan / ton. Recently, with the fluctuation of crude oil prices, naphtha and ethylene prices have dropped sharply. At present prices, the ethylene law has made a slight loss of about 300 yuan / ton (but the historical loss to 1200 yuan / ton will only consider the reduction of production), and the naphtha method still has a small profit margin.

In terms of demand, downstream polyester enterprises are running higher than before, stock is good, but demand is not high. The terminal market is still in the traditional off-season. Last week, the load of Jiangsu and Zhejiang looms dropped 3 percentage points to 74% compared with the previous week, while the weaving inventory remained at a high level. Last week, grey fabric inventory has been rising to 42.5 days for 12 consecutive weeks. Under the background of short-term co-existence of restart and maintenance, the polyester load level is expected to remain stable.

On the periphery, the US trade representative's office began a 7 day hearing on Monday, asking for advice on adding tariffs to another US $300 billion in US goods. According to the timetable, the hearing will end on the 25 th of this month, and the fastest tariff increases will be put into effect in July 2nd. The next major tariff targets are mobile phones and laptops, other children's vehicles, video game consoles, computer monitors and clothing, footwear, toys, games and sports equipment, books. Only a few Chinese products have avoided the threat of all four rounds of tariffs, including medicines, chemicals, rare metals and medical supplies. If the United States continues to levy tariffs in spite of the wave of opposition, the domestic textile and apparel industry chain will suffer a negative impact in the short term.

Under the guidance of the lack of obvious changes in supply and demand signals, the external uncertainty factors perturb the market operators' mentality, and in the absence of short kinetic energy under the low ethylene glycol operation, the futures shrinkage is also obvious. In the short term, it is expected to maintain the low range operation and wait for the direction of the external information surface to release. In the long run, the oversupply pattern has not yet changed the market and there is still a downward revision.