Introduction: Since February, the fundamental performance of ethylene glycol has been poor, and the price has started a downward trend. As of February 23, the closing price of ethylene glycol in East China was around 4920-4930 yuan/ton, a year-on-year decrease of 4.65%.
1. Costs continue to narrow, and some companies have reduced their equipment load
Data source: Jin Lianchuang
Crude oil prices continued to fluctuate at high levels during the month, and raw material prices rose. The average monthly production cost of naphtha was US$823.84/ton, equivalent to a RMB price of approximately 5,300 yuan/ton, and the average monthly production cost of coal was 7,177 yuan/ton. tons, after the coal price fell during the month, the enthusiasm for starting coal production increased, ethylene glycol pre-maintenance equipment was started one after another, and the overall start-up load increased, while the market performance was relatively average, all ethylene glycol companies were in a state of loss, and the average monthly profit price of petroleum production At -928 yuan/ton, the average monthly profit price of coal production is -2,067 yuan/ton. There are rumors in the market that some companies have decided to reduce their workload due to profit issues.
2. Supply and demand are at a stalemate, and the market is generally light.
Data source: Jin Lianchuang
The sharp rise in crude oil prices at the beginning of the month has led to a positive market sentiment. The price of ethylene glycol has surged to a maximum of 5,500 yuan/ton. The cost side has strong support and bulls’ confidence has been boosted. However, as coal prices have fallen, some early maintenance equipment has been put into operation, and the overall operating load has been increased. The price rises, and the port is overcrowded, shipments from the reservoir area are not smooth, and the demand for polyester from the downstream is weak, resulting in a weak price push; in the second half of the year, the market continues to be weak, and crude oil prices continue to fluctuate at high levels, resulting in gradually narrowing profits, and the reduction of the load of some devices is detrimental to There is some support in the market, but demand remains weak and the market mentality is frustrated. The low end of the offer fell to 4910 yuan/ton. Bulls lack confidence due to the continued stalemate between supply and demand, so they are more cautious and wait and see.
Taken together: crude oil can still be supported by high levels, which is good for the cost end of ethylene glycol. In March, the output of Shanxi Meijin and the start-up of the Yanshan petrochemical plant have significantly increased market supply. However, at the same time, the downstream polyester industry and the terminal weaving industry have started to load. Gradually improving, there will still be a certain demand for replenishment in the later period, which will provide certain support for the ethylene glycol market, but it is still necessary to pay attention to the impact of ethylene glycol’s profit margin.
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