Macro Easing, Where Will The Glycol Go Under The Market Of Banknote Printing Machine?

On the first day of this week, the G20 summit came to a good end. Pet end weekend performance continued strong, ethylene glycol follow up slightly. But this week there are more terminals coming to Hong Kong, and high stores are suppressing market sentiment or pessimism. What is the trend of ethylene glycol market in the short term?

Upstream is experiencing critical moments.

As OPEC and the general assembly are drawing near, oil ministers and OPEC officials have made their own analysis and outlook on the prospect of the meeting and the reduction agreement. The most important news of the weekend is that Russian President Putin said that Saudi Arabia agreed to cut the production agreement at least until the end of this year. Saudi energy secretary Falich said the most likely result was to extend production for 9 months and maintain the same scale of production reduction without deepening.

In addition, OPEC Secretary General Barkin said that the current production reduction agreement is expected to be extended to the first quarter of 2020. Iran oil minister Zambia emphasized that Iran will abide by all OPEC and OPEC decisions, and the yield reduction agreement is expected to extend for 9 months. So we expect the oil price to go up.

Stock supply is ample and main port inventory is high.

At the present stage, the supply of ethylene glycol in our country is abundant, the PTA of the related products is rising and the demand for polyester in the lower reaches is rising slightly. The domestic market prices of ethylene glycol are rising, the profits of enterprises are still losing money, the factories haven't substantial and large-scale reduction in production, the market situation is difficult to have the upward expectation, the maintenance enterprises delay the commencement time, the normal production enterprises reduce the burden (reduce the contract volume), or the equipment performs the round inspection. Focus on port inventory, since June, East China's main port inventory showed a long decline trend.

Last week, the port inventory of ethylene glycol decreased by 57 thousand tons, but the cargo arrived in Hong Kong this week is expected to be 228 thousand tons. There are more ports to Hong Kong, and there is a pressure of storehouse.

Downstream demand shows good

After the G20 summit, the Sino US trade negotiations turned out to be good, and the us no longer imposed new tariffs on Chinese products. The worry of the terminal weaving enterprises will be improved, weaving orders will come down one after another, and subsequent attention will be paid to the loom load changes. In addition, the current polyester stocks are still declining, POY, DTY, FDY stocks fell to 1 days, 12 days and 4 days respectively. It is expected that the polyester load will continue to climb upward under the demand of terminal demand.

To sum up: the inventory of ethylene glycol has rebounded, and the social inventory has been improving and the high starting point of polyester has been maintained obviously for the spot market. However, the order follow up in the terminal market still needs to be followed up. At present, the inventory transfer is reflected in the process of production and marketing, and the actual digestion situation still needs time verification. It is expected that the short-term market of ethylene glycol is mainly warm and volatile, with an interval of 4200-4580.