“Golden nine and silver ten” have always been the industrial characteristics of the chemical market. However, since late October, domestic chemical futures have generally experienced sharp corrections, especially in the coal chemical sector. Yesterday afternoon, the domestic futures market closed, with methanol, ethylene glycol, and PVC falling by the limit simultaneously. After the opening of the night session, the main methanol contract once hit the lower limit and fell nearly 11% by the close of the night session.
It is difficult to say that methanol will bottom out in the short term
Recently, the coal market has continued to The price limit order was passed with unprecedented intensity, the cost side of methanol is expected to reverse, and the valuation of the industrial chain has been revised downwards. It is difficult to say that it has bottomed out in the short term.
Feng Bing, a senior researcher at Donghai Futures, said that due to market rumors on October 27 about the “Discussion on the Plan to Establish a Standardized Coal Market Price Mechanism”, coal prices continue to adjust, and thermal coal northwest The pit price may be controlled between 300-500 yuan/ton. Inferring from this, the production cost of methanol is less than 1,800 yuan/ton, which is less than 2,400 yuan/ton in East China.
“From the supply side, the upstream production areas in the Mainland are still troubled by the tight supply of raw materials. Production companies that purchase raw materials from outside have increased losses and have reduced their load in the short term. At the same time, the fourth quarter is limited. As gas is approaching, the load of the gas head unit will decrease. On the demand side, methanol spot prices continue to fall, the profit of the port MTO unit is estimated to be reduced, and the starting load is expected to increase marginally. However, the large Ningbo Fude MTO unit is expected to be shut down in November, and demand is still favorable. The empty space waiting to be realized may suppress the room for port price rebound. On the foreign side, the load of European devices has declined due to insufficient raw materials, the load in the Middle East has been stable, international re-exports have increased under the high overseas US dollar prices, and domestic imports are expected to decline. In terms of inventory, the mainland downstream is bearish. , the wait-and-see sentiment has increased, mainland production inventories have rebounded, and ports have accelerated the recent arrival of stranded cargo, while the collapse in demand for MTO devices has brought negative feedback pressure, and the port inventory will tend to accumulate in the later period.” Tan Yang, a chemical researcher at China Merchants Futures, told a reporter from Futures Daily .
“Since September, the methanol market logic has been dominated by policies. The rising market in September was triggered by dual energy consumption controls and the price surge caused by tight thermal coal supply. The methanol plunge stems from The National Development and Reform Commission controls coal prices. With the formulation of the coal market price mechanism, it is expected that the methanol price center will continue to move downward. At the same time, the fundamental supply and demand mismatch dominates the rhythm. We need to be wary of uncertain risks on the policy side.” Feng Bing said.
Tan Yang said that overall, weak demand is dragging down, and the negative policies on the raw material side continue to price. It is expected that the short-term methanol trend will be weaker following the resonance of the coal side, and near-end transactions During the cycle, attention should be paid to the shortage of coal and gas on the supply side leading to volume reduction, as well as the expectation of marginal improvement in downstream MTO demand as profit pressure eases. From a mid- to long-term perspective, if the coal downward channel materializes and the methanol 05 contract returns to the fundamental logic of loose supply and demand, coupled with downward costs, there may be short-selling opportunities.
Coal prices “collapse” with ethylene glycol and PVC
Ethylene glycol fell by the limit yesterday. Some market participants told reporters that the main reason was still driven by the weakening resonance of coal prices. The reporter learned that relevant departments have recently held a series of coal price limit meetings and clarified mechanisms for ensuring supply and cleaning up illegal production capacity. The market sentiment has clearly reflected the market sentiment, with both thermal coal and double coke falling by the limit, and ethylene glycol, which accounts for more than 36% of the coal chemical plant’s production capacity, also followed the extreme market sentiment and fell by the limit.
Wang Yilu, a senior researcher at Donghai Futures, said that in terms of the start-up of ethylene glycol oil production, there are many restarted devices. The current load of the ethylene process is about 75%, and the load has rebounded slightly. The operating rate of coal-to-ethylene glycol has recently remained at a low level of 38%, and the weekly output of ethylene glycol is around 200,000 tons. In terms of new production capacity, due to lack of coal, all coal-based MEG units have been postponed. In terms of inventory, because the port stagnation situation has eased in the early stage and the unloading speed has accelerated recently, all ports are above 200,000 tons. However, due to fewer arrivals in the early stage, the inventory in East China has only increased slightly recently, and the overall inventory level remains At an absolute low.
In addition, in the fourth quarter, as the impact of power restrictions eased, downstream construction operations increased slightly, profits improved, cash flow improved significantly, and polyester inventory also appeared. After being greatly removed, the overall polyester has improved.
Wang Yilu believes that with limited supply and continued improvement in downstream demand, the fundamentals of ethylene glycol are still supportive. The recent fluctuations driven by coal prices have been large, and the short-term uncertainty It is recommended to carry out operations and try to go long after the market gradually returns to rationality.
Shao Yanan, a chemical researcher at Centaline Futures, said that the obvious excessive rise in ethylene glycol in the early stage was mainly due to expectations for future cost-side energy. Under the high price of ethylene glycol, the profit level of the naphtha integrated unit, the main process, hit a three-year high, and the valuation entered a high-risk area. With the sharp correction of coal, energy speculation has cooled down, and the high valuation of ethylene glycol has been superimposed, resulting in a deep V decline. In just a few trading days, the high valuation of ethylene glycol futures was quickly corrected. However, just like the excessive rise in the previous period, it is also prone to excessive decline. As the bottom is not yet clear, it is recommended to wait patiently for new prices. Opportunities come.
“The negative factors in the recent changes in the price of PVC futures are relatively obvious, mainly due to the significant pressure on market sentiment.” Shao Yanan said. He said that the load of some PVC companies that purchase calcium carbide has further increased recently, and that some ethylene process companies have increased their operations, so the industry’s overall operations have increased., marginal supply has recovered, while demand-side expectations are relatively negative due to the impact of real estate and other data in the fourth quarter. In the short term, it is difficult for downstream rigid demand to increase significantly. On the other hand, cost-end calcium carbide prices have also begun to loosen and fall due to the easing of power cuts.
Shao Yanan believes that on the whole, negative factors such as the recent weakening of PVC supply and demand and loosening of costs have been reflected in the futures market in advance. In addition, the emotional panic caused by the thermal coal limit has led to PVC The futures price has fallen below the 10,000 yuan/ton mark, approaching 9,000 yuan/ton. In the later period, we should pay attention to the actual decline in costs and changes in social inventories. It is still unlikely that the tight supply and demand situation at the calcium carbide end will be reversed in the medium and long term. The current cost decline has certain stage characteristics. Beware of calcium carbide power rationing disturbances intensifying again. The negative risk lies in social Inventories continue to accumulate significantly. Overall, the market outlook may still be weak in the short term, but it is recommended to wait and see for the time being. </p
