Analysis And Prediction: Can The Price Trend Of Ethylene Glycol Continue To Be Strong In December In 2020?

The price of ethylene glycol market in China, on the day of December, appeared the highest 6000 yuan / ton this year. Ethylene glycol manufacturers were happy, and lost a year to the end of the year, and finally made a profit; and downstream polyester enterprises "cried" sound, earned a year's money, the year will be short to start losing money. Some people are glad that someone is worried about whether the market will continue to be mandatory or not.

First, understand the strong reasons for December.

Fig. 1 price change trend of ethylene glycol market in East China

Source: lung Chung

Basically, when the terminal is closed, the market will continue to shift, and the terminal inventory will drop again and again. The absolute value of the inventory will reach a new low within a year. Although the downstream polyester market is overloaded with year-end overhaul, the market is in the second half of the month with the help of low inventory and low time in the market. The price rises violently, and the market price spreads in the second half of the month. The price difference spreads to the maximum value of 700 yuan / ton, and the highest spot price in the month is 6000 yuan / ton. Then the price appeared at the turning point of the stock, and the domestic MEG started to load up, and the supply gradually became abundant.

Port inventory after market

Fig. 2 domestic Ethylene glycol East China main port inventory map

Source: lung Chung

As of December 26th, the MEG port in East China's main port area has a stock of about 426 thousand and 500 tons. Among them, 199 thousand tons in Zhangjiagang, 95 thousand tons in Ningbo, 51 thousand tons in Shanghai and Changshu, 44 thousand and 500 tons in Taicang, and 37 thousand tons in Jiangyin.

In December, the comprehensive operating rate of ethylene glycol in China was near 68%, of which the coal loading started near 65%, and the overall domestic supply remained low. While the polyester terminal maintained at around 85% of the start-up load, coupled with the low level of imports this month, the East China main port continued the pattern of storage, the highest 1 million 436 thousand tons in the year, the lowest compared with the lowest 1 million 42 thousand tons, a decrease of 72.56%.

Analysis and expectation in January 2020: With the trial run of Hengli and Rongxin in December, the probability of increasing the two sets of equipment in January was greater. In addition, with the decline of polyester load near the Spring Festival, the main port inventory in East China will increase slightly in January.

Analysis and expectation in February 2020: Domestic production increased and polyester load slowly increased. In February, the overall supply and demand pattern in China was relatively balanced, and the total inventory in East China's main port in February changed little.

Analysis and expectation in March 2020: The constant force glycol unit will be mass produced. The ethylene plant of Zhejiang Petrochemical Company will enter the trial run. There will be a substantial increase in the domestic market and a stable pattern in the import side. In March, the main port inventory in East China increased considerably.

Market price in East China

Fig. 3 domestic Ethylene glycol price trend and 3 month forecast sketch map

Source: lung Chung

Deadline for December, the average monthly price of ethylene glycol in the market is 5163 yuan / ton, up 539 yuan / ton or +11.66% from last month, down 508 yuan / ton or -8.96% compared with the same period last year. The docks continued to go to the warehouse, and the tight stock situation led to a sharp increase in spot prices in December.

Analysis and expectation in January 2020: In January, due to the influence of the Spring Festival, the starting load of the polyester industry is expected to be reduced to about 77%. The terminal weaving industry began to enter the holiday period from the end of December, accounting for 30%-40%. It is expected that the terminal will basically enter the rest stage in the month of January 10-15. The industrial chain transmission will show that the polyester will gradually change from low inventory to exhausted warehouse. On the supply side, with the recent repair of MEG domestic factories, the supply side of the market will gradually become more abundant, and the turning point of the port stock has already appeared. It is expected that the domestic ethylene glycol market will be low in January, and the monthly average price is expected to be around 4400 yuan / ton.

Analysis and expectation in February 2020: Domestic output increased, stacked port inventory due to the accumulation of Spring Festival factors, the supply side will continue to lose pressure. It is estimated that domestic ethylene glycol will continue to be vulnerable in February 2020, and the monthly average price is expected to be around 4200 yuan / ton.

Analysis and expectation in March 2020: Hengli and zhe Petrochemical mass production have made great changes in the domestic supply pattern, and the purchasing desire of the demand side has been suppressed. It is estimated that domestic ethylene glycol will continue to be vulnerable in March 2020, and the monthly average price is expected to be around 3900 yuan / ton.

On the whole: The answer is whether ethylene glycol can continue to be strong in December. However, the force majeure factor will not be excluded. If the market falls, the market will probably pull up again, and several times in 2019. Specifically, it will no longer be spoiled. Let's leave it to time to verify it.