Introduction: In the third quarter, the domestic ethylene glycol market first fell and then rose, but the positive market support was limited throughout the quarter. During the quarter, the high-end price was 4,260 yuan/ton, the low-end price was 3,875 yuan/ton, and the price difference between high-end and low-end was 385 yuan/ton. How will the market develop in the fourth quarter?
Data source: Jin Lianchuang
Review of trends in the third quarter:
In July, the domestic ethylene glycol trend fluctuated and declined, and the overall market atmosphere was weak. CNOOC and Shell’s maintenance equipment started operation, Shanxi Woneng and Xinjiang Guanghui units restarted, and the port’s accumulated inventory reached 970,000 tons. There was a certain increase in the market supply side, and the downstream polyester The construction start-up is close to 90%, and terminal demand has recovered slightly. However, polyester is mainly cleared of warehouses, and most of them are used and harvested. The demand remains weak, and the market lacks substantial positive support.
Domestic ethylene glycol fluctuated strongly in August. The cost side was affected by the reduction in crude oil production. The price continued to fluctuate at a high level. The psychological support was acceptable. The operating load of Hainan Refinery increased to around 80%. The load of Hengli Petrochemical Unit was reduced. Shaanxi Weihua, China The maintenance of units of Ke Refining and Chemical, Sanjiang Petrochemical, Yulin Chemical and CNOOC Shell, the decline in start-up supports the market mentality, but the port inventory is still at a high level. Although shipments have improved slightly, they are far less than the number of cargo arriving at the port. At the same time, the start-up of downstream polyester is at a high level. The market is fluctuating, and polyester factory inventories are not high, but terminal performance is poor in the off-season, resulting in polyester demand mainly for replenishment. Buying follow-up is average, and the market supply and demand are still slightly stalemate.
In September, the price of ethylene glycol continued to rise and then fell back. Most of the positive news came from the macro perspective. Although the port continued to destock and the port destocking and shipment situation improved, the inventory is still at a high level. Due to the maintenance of multiple units of Sinopec East China, supply pressure is still on the side. Large, Xinjiang Zhongkun will start operations within the month, and downstream polyester production will also decline due to the impact of the Asian Games. Procurement tends to be low-priced sources, and the continued upward momentum for ethylene glycol prices is still insufficient.
Fourth quarter trend outlook:
Table 1: Ethylene glycol unit start-up and shutdown plan in the fourth quarter
Data source: Jin Lianchuang
The current maintenance installations in the fourth quarter are Shanxi Woneng and Xinjiang Guanghui, while the other preliminary maintenance installations are starting to start up in the fourth quarter. There is a possibility of a certain increase in market supply. Moreover, two new installations in Xinjiang Zhongkun and Yuneng are starting up. It is difficult to destock the port. increase again. On the demand side, due to the impact of the Asian Games, some downstream production cuts and load reductions have yet to be determined and the restart time is yet to be determined. Demand has decreased, but at the same time, stimulated by some festivals, there is still some support for the market.
Taken together, although the domestic ethylene glycol market in the fourth quarter gradually entered the off-season for the polyester market, the contradiction between supply and demand is still difficult to alleviate, and long-term fluctuations are mainly maintained, with prices expected to decline.
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