Introduction: In 2020, ethylene glycol will move forward under pressure and falter. The sudden “new pneumonia” epidemic has long shrouded the industrial chain. Moreover, new equipment was put into operation very cautiously in 2019. With a wave of concentrated production in 2020, ethylene glycol production capacity increased rapidly and entered the stage of oversupply, putting market spot prices under long-term pressure. So entering 2021, where will ethylene glycol go?
As can be seen from the figure below, in recent years, domestic ethylene glycol production capacity has shown a slow growth trend, and entering 2020, the growth rate of production capacity will be more obvious. As new devices are put on the market, ethylene glycol has entered a stage of oversupply, and if the launch of new ethylene glycol devices does not decrease by 2021, the oversupply may be taken to the next level.
But judging from the market conditions, the domestic ethylene glycol price in 2020 fell below last year’s 4,000 yuan/ The price reached a low point of 3,400-3,800 yuan/ton during the year. As the spot price was too low to penetrate the cost price of domestic coal-to-ethylene glycol, coal-to-coal plants underwent large-scale maintenance for several consecutive months. Moreover, this year’s peak season for the Gold, Nine and Silver Tens of Years is not as effective as in previous years. Weak downstream demand makes it difficult for port inventories to continue to be reduced. It is expected that port inventories of more than 1 million tons will become the market norm. Even if the market price has risen to some extent in the fourth quarter, due to inventory pressure, the highest spot price has hovered around 4,100 yuan/ton.
By 2021, according to statistics, China’s ethylene glycol production capacity will reach 22.986 million tons, and China’s polyester production capacity will be 68.335 million tons. If China’s import volume is calculated as 10 million tons, the total supply is predicted to reach 21.568 million tons, and the total demand will reach 19.005 million tons. It is not difficult to see from the theoretical data that China’s ethylene glycol will be in a state of oversupply in 2021.
With the rapid development of coal-to-ethylene glycol, the growth rate of China’s ethylene glycol production capacity is inseparable from coal-to-ethylene glycol. Regarding the production capacity of coal-to-ethylene glycol, despite the improvement of the new device process and its insensitivity to costs, industry insiders are still not optimistic about the new investment progress of coal-to-ethylene glycol in 2021. However, even if all new coal-to-ethylene glycol production capacity is removed in 2021, it is expected that there will still be 3.85 million tons of new installations in 2021, with the total supply reaching 20.23 million tons, and there will still be a gap of 1 million tons between supply and demand. Therefore, there will still be a state of oversupply in 2021.
From the perspective of coal-based companies, when the spot price of ethylene glycol is around 3,800 yuan/ton, some coal-based plants with lower process costs have successively announced restart plans, so ethylene glycol is It is difficult to clear large-scale production capacity at the current price, and the elimination of backward production capacity with new production capacity will be a slow process. And from a product perspective, most of the new installations are mainly multi-product co-production. The ability to resist risks of a single product is gradually being paid attention to by enterprises. The subsequent development direction of ethylene glycol plants will be in the direction of integration, centralization and co-production. develop.
Generally speaking, there are still macro uncertainties about crude oil and Sino-US trade relations, which worries the market. And since it is difficult to phase out backward production capacity in a short period of time, the oversupply situation will continue in 2021. In the future, we still need to pay attention to the progress of new production capacity and whether the “new pneumonia” epidemic will become a normal condition and continue into 2021. </p
