1. News events: India’s epidemic worsens, textile orders return
In April 2021, the second wave of COVID-19 in India rapidly worsened and became the most high-profile event in the global fight against the epidemic. The raging epidemic has caused many factories in India to close, and many local companies and multinational companies are in trouble. As the impact of the spillover of the epidemic in India continues to emerge, the situation of the new crown epidemic continues to change. After the United States and India have successively become the “global epidemic hardest hit areas,” serious epidemics have resurfaced in Southeast Asian countries, and the epidemic prevention situation is not optimistic. The COVID-19 epidemic has led to the closure of shopping malls and factories, and serious unemployment problems. Some brands are selling at half prices, and workers’ wages have been reduced by one-third. According to the report, in the 10 months ending in April this year, clothing exports were US$26 billion, a year-on-year increase of 6.24%, of which knitted garment exports were US$13.99 billion, a year-on-year increase of 15.34%. Clothing exports in March were US$3.07 billion, a year-on-year increase of 12.59%. This was mainly due to the relaxation of the blockade in the western region, which led to the slow recovery of clothing exports and the suspension of road transportation with India until May 31.
Affected by the epidemic, India cannot guarantee normal delivery, and some domestic companies have received some overseas return orders. Affected by this, domestic cotton yarn and short-term futures prices have risen significantly, and some supplies are in short supply. The return of orders from India will naturally help the domestic textile industry flourish. However, May has entered the traditional off-season. Most textile mills in coastal areas have not received new orders. Instead, orders have gradually weakened. There is a lack of favorable conditions at the macro level. The epidemic abroad continues to ferment, and terminals Orders are becoming more cautious, and there are certain difficulties in implementing foreign trade orders. Negative factors such as high shipping costs and the still severe overseas epidemic situation have been released.
2. News events: Double control policy on energy consumption increased
The concept of “dual control of energy consumption” was first proposed at the Fifth Plenary Session of the 18th CPC Central Committee on October 26, 2015. In September this year, the National Development and Reform Commission issued the “Plan for Improving the Dual Control System of Energy Consumption Intensity and Total Consumption” “, proposed to strictly formulate dual energy control indicators for each province, and reserve certain indicators at the national level; promote market-based transactions of energy consumption indicators; and improve the management assessment system. In order to actively respond to the dual energy consumption control policy, provinces across the country have introduced one after another A series of measures are taken to promote energy consumption and emission reduction by limiting the total electricity consumption of high-energy-consuming enterprises, increasing electricity prices, and limiting electricity usage periods.
Because ethylene glycol is involved in the coal chemical industry, under the dual energy consumption control policy, the impact of corporate power restrictions on ethylene glycol is greater than that of other products in the industry chain. Affected by the dual control increase in Jiangsu and Zhejiang, Far Eastern United operates at reduced load, and satellite petrochemicals start single lines. , the load of the Yangba plant was reduced, and Sanjiang Chemical and Sierbang were shut down. However, as the power cuts gradually spread to more provinces, Anhui Hongsifang and Jianyuan Coal Coking were shut down one after another. The overall operating load of ethylene glycol dropped again, and the supply side concentrated collection. The tight boost to the growth of ethylene glycol ranks it at the forefront of the polyester industry chain.
3. News events: Impact of extreme weather, reduction of ethylene glycol imports
In February, the extreme weather caused by the cold wave in North America seriously affected the power system of the U.S. ethylene glycol plant. Multiple ethylene glycol plants were shut down, with a total production capacity of around 2.9 million tons. The U.S. ethylene glycol supply was significantly reduced, and domestic imported resources There has also been a significant reduction, with imports in February reaching 590,000 tons, a year-on-year decrease of 30.11%. At the same time, the deep freeze caused the national oil production to plummet by 30%, causing WTI crude oil to exceed 61 US dollars per barrel. Supported by dual favorable factors on the cost side and the supply side, the ethylene glycol market also successfully exceeded the 6,000 yuan mark.
4. News events: National Development and Reform Commission releases coal price intervention policy
In the context of global energy shortages, domestic coal supply and demand are tight, and prices have been soaring. The contradiction between coal and electricity is particularly prominent, rising to the highest point of the year in mid-October. On October 19, the National Development and Reform Commission issued a document clarifying that it will take temporary intervention measures in coal prices in accordance with the “Price Law” to formally clarify the price limit signal. In the following days, the National Development and Reform Commission successively issued coal price control news such as “investigation of coal production and distribution costs” and “review of coal price index”, making the expectation of coal price limit further clear. Affected by this, the main thermal coal contract fell to the limit many times, and the domestic chemical sector futures fell sharply. The plummeting cost side led to pessimistic sentiment in the ethylene glycol market and opened a downward channel.
5. European arbitrage space opens up, and domestic ethylene glycol exports increase significantly
Starting from May 14, 2021, the EU will take temporary anti-dumping measures on ethylene glycol from the United States and Saudi Arabia. The spot price in the European market has been soaring, reaching the highest position on March 5. The price in northwest Europe was 1,080 euros/ton, which was 1,500 yuan/ton higher than the Chinese price at this time. The European arbitrage space opened up, and China’s export volume surged, 1-10 The total export volume in the month was 122,800 tons, an increase of 100,000 tons year-on-year.
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