Introduction: Recently, international crude oil has continued to rise, and domestic ethylene glycol companies have been under cost pressure. Market prices have followed up and are actively rising. In order to reduce supply pressure, individual companies have begun to reduce their burdens. Polyester companies have steadily increased their operating starts. Demand is good, but due to cost pressure, Under constant losses, some companies began to discuss whether to reduce their burdens to avoid risks. In the dilemma, terminal weaving said that orders were still light, and it was difficult to reduce the high inventory of polyester terminals. For ethylene glycol, they were still mainly bought only when they were in demand. Under the stalemate between supply and demand, The rise and fall of raw material prices affects the rise and fall of negotiated prices in the ethylene glycol market.
Raw material end: (raw material prices have fallen from high levels, but costs are still supported)
Figure 1 International crude oil price trend chart
At present, the core benefit of the continued rise in oil prices mainly comes from concerns about supply risks caused by the situation between Russia and Ukraine. The sharp drop on March 9 was due to Ukraine saying that its neutrality status was negotiable, and the situation showed an opportunity to ease for the first time. The supply concerns of the industry have increased. weaken. It is expected that international oil prices may have room to rise next week, the situation between Russia and Ukraine may still be entangled for some time, and there is also uncertainty about the resolution of the Iran issue. WTI is expected to operate in the range of US$104-116/barrel, and Brent may operate in the range of US$107-119/barrel. (For details, please see the international crude oil section information on the website)
Supply side: (supply begins to fall, inventory accumulation slows down)
Figure 2 Domestic ethylene glycol production start trend chart
As of March 10, the average operating load of domestic ethylene glycol was approximately 65.27%, of which the operating load of non-coal-based ethylene glycol was approximately 69.25%, and the operating load of coal-based ethylene glycol was approximately 57.98%. The total inventory of MEG ports in the main port area of East China is 950,700 tons, an increase of 19,700 tons from Monday; a decrease of 12,400 tons from last Thursday. At present, Zhejiang Petrochemical 1# and Hengli Petrochemical 1#2# have fallen slightly; Yangzi Petrochemical and Xinhang Energy devices have stopped; Sanjiang Chemical and Xinjiang Tianying device load has increased slightly; Xinjiang Tianye Shihutan 600,000-ton device has restarted and the load has returned Stablize. In the next cycle, in terms of the start-up of domestic ethylene glycol units, Xinhang Energy’s two lines will be shut down for maintenance but restarting on the weekend is expected to have a limited impact on output; in terms of integrated units, after Zhenhai Refining and Chemical’s EO starts up next week, the EG load will be reduced. Overall Judging from the current situation, domestic production is mainly stable and slightly declining.
Demand side: (The demand for polyester is increasing slowly, but it is mainly rigid demand, and the negative impact is expected to be reduced in the future; the terminal weaving start-up rate is limited)
Figure 3 Domestic terminal weaving start-up trend chart
According to Longzhong Information statistics, as of March 10, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang was 66.66%, an increase of 2.61% from the previous month.
Summer thin fabrics and some home textile fabrics were released in small batches this week, but there is still a downward trend compared with previous years. Most downstream users reported that the order sustainability is poor, and the current cost-end pressure is high. Affected by the tense war situation, export resistance has increased. Largely, the delay in foreign order negotiations shows no sign of improvement. Most downstream weaving factories maintain basic operations and mainly produce conventional models for inventory. The market outlook is still cautious.
Figure 4 Forecast trend chart of domestic downstream polyester operating rate changes
According to Longzhong Information statistics, as of March 10, the average operating rate of the polyester industry was 93.96%. According to Longzhong’s understanding, equipment maintenance and restart in the domestic polyester industry coexist. Domestic polyester factories that have reduced production for early maintenance and maintenance will continue to increase their loads during the week, such as Xinfengming, Desai, etc. However, the failure of Luoyang petrochemical equipment and the additional maintenance of Yizheng Chemical Fiber have dragged down the room for growth in the output of the polyester industry, but the overall supply increase is still higher than the shrinkage. Therefore, the output and load of the domestic polyester industry increased slightly this week. Looking at next week, the load of equipment maintenance and restart will be around 93-94%.
To sum up: international crude oil has fallen rapidly, and the strong support for ethylene glycol costs is still there. According to the current crude oil price, the integrated ethylene glycol unit is still in a loss-making state, and some integrated plants have recently begun to reduce their load to a certain extent. Adjustment, in the short term, cost and supply still provide certain support to the market; on the demand side, polyester production starts next week are expected to remain at a high level of 93%-94%. Although production and sales are restricted by orders, it is difficult to improve quickly, but high production starts The stable demand below is still there, and the short-term ethylene glycol low of 5,250 yuan/ton is expected to recover and rebound to 5,500 yuan/ton.
ps: This time I really didn’t slap you in the face. I came to 5500, but it came and went quickly. It was all caused by the macro. Sit down and continue watching. What are you watching? Think to yourselfHahaha.
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