Asian Glycol Prices Fell To Its Lowest Level In Nearly 2 Months.

Recently, a market consultancy pointed out that the price of ethylene glycol in Asia dropped to its lowest level in the past 2 months. Market sentiment may continue to be impacted by the coming new supply. In the week of November 1st, the price of glycol in Asian market closed at 541-545 US dollars / ton (CFR China's main port), the lowest level since September 6th.

Under the squeeze of profits, some ethylene glycol producers in Asia and the Middle East have reduced the start-up rate of ethylene glycol plant, resulting in a decline in the import of ethylene glycol in China in September. A trader in Asia said: "based on the current price of ethylene glycol, the main suppliers do not have a high profit margin. We can see from China's latest import data that producers are cutting production under weak earnings. "

In the first few months of the first quarter of 2020, 3 new ethylene glycol plants will be put into operation in Asia. The Malaysia state oil company, the margin oil refinery and Petrochemical Industries Co (PRef-Chem), will put into operation the 750 thousand ton / year ethylene glycol unit by the end of the year. Hengli Petrochemical may launch its 900 thousand ton / year ethylene glycol plant by the end of November. In the first quarter of 2020, Zhejiang Petrochemical also planned to put 1 sets of 750 thousand ton / year ethylene glycol units into operation.

Over the past 2 months, the expected growth in regional supply has been holding back buying sentiment. At present, the spot price of ethylene glycol in Asian market is higher than that in the long term, indicating that there is a spot premium since the end of October. A major ethylene glycol importer said that interest in purchases of goods has weakened in December, and that sentiment may be more pessimistic in the coming weeks.

Glycol is also facing slower demand for polyester downstream. Some major polyester factories in China are cutting production to cope with rising inventories and falling profit margins. In November 1st, the average operating rate of China's polyester plant dropped to 89% from 1 months ago, according to the data of annex. The stock of Chinese filament yarn increased from 2-20 days in early September to 10-24 days in early November. Many factors affect China's manufactured exports, including textiles and clothing. These products are mainly made of polyester yarns and fibers. A polyester manufacturer in China said: "the polyester industry is usually off season at the end of the year, because downstream processors have completed export orders."