Introduction: “Golden Nine and Silver Ten” have been the peak seasons for ethylene glycol and downstream polyester over the years, but this year the market continues to perform poorly. The average price from January to July hovered at 4,900 yuan/ton. The peak season is coming soon, and prices may continue to be affected by demand. If prices go higher, the trend may also be unsatisfactory due to excess supply.
1. Supply is expected to decrease
Data source: Jin Lianchuang
In the second quarter, the overall ethylene glycol production start-up remained at around 57%. The start-up has been fluctuating at a low level. Due to the recent continued rise in crude oil prices, the cost of ethylene glycol production has increased. Affected by low profits, some refinery units have reduced their load or shut down for maintenance. Most of them are integrated devices, and future device maintenance will be more concentrated. In the early stage, Shanghai Petrochemical shut down and restarted due to emergencies, and the restart time is yet to be determined. Hubei Sanning maintenance has been postponed to August to September. Hengli Petrochemical plans to inspect two sets of devices at the end of July and early August. Zhejiang The 900,000-ton satellite device will be shut down for maintenance in July. To ensure the supply of raw materials for plastic production, Xinjiang Guanghui may shut down for maintenance from August to September; Ningxia Kunpeng may be put into production in September. It is expected that the start of the entire third quarter may be 50-60% Range oscillation.
Affected by the epidemic in the early stage, demand weakened and logistics restrictions caused port inventories to rise to a high level of more than one million tons. In the later stage, with the successive maintenance of several large-scale domestic devices, supply is expected to decrease, and there is also the possibility of destocking at the port. However, due to the early stage Inventories have risen to more than 1.2 million tons, and destocking will be slower. In terms of imports, Petronas and Taiwan’s South Asia plants are expected to restart in September, but at the same time, the US South Asia plant plans to shut down in mid-July due to efficiency reasons, and Singapore Shell plans to shut down for maintenance from July to August, so imports may be reduced to a certain extent.
2. Demand or possible recovery
Data source: Jin Lianchuang
The start-up load of polyester is also relatively average in the traditional peak season of demand for gold, silver and silver. Affected by the epidemic, the start-up of domestic textile companies has declined instead of rising. Coupled with the decline in overseas demand, textile exports are also facing greater pressure. Weaving companies have started operations since March It was around 70% in the first ten days of the month, and has now dropped to a low of 50%. Dragged down by weak terminal demand, downstream follow-up is limited, and the market trend is relatively weak. Therefore, corporate losses have relatively intensified, and some filament manufacturers have recently reduced production and reduced burdens. Among them, Hengyi Petrochemical, Tongkun and Xinfengming reduced their negative prices by 30%, Hangzhou Southeast Chemical Fiber stopped for maintenance on July 5, Zhejiang Gu Fiber reduced its negative value to about 20%, and Hengli Hengke’s equipment was overhauled. It is expected that the supply of polyester will tighten in the future, and the inventory of polyester companies is not high, which will still provide certain support for the market. However, under the influence of the terminal textile off-season, the follow-up of domestic and foreign sales orders has slowed down, and it is about to enter the peak season of polyester gold nine silver ten, August The demand side may recover to a certain extent, and downstream replenishment may push up the price of ethylene glycol. Polyester will enter the peak season in September, and the demand for ethylene glycol will also increase.
Data source: Jin Lianchuang
Because there are many uncertainties in the new downstream polyester installations, the short-term downstream new additions are expected to be around 730,000 tons, while the new additions of ethylene glycol in the third quarter are expected to be around 1.4 million tons. Inner Mongolia Jiutai and Ningxia Kunpeng are based on unit consumption. It is calculated that the consumption demand for ethylene glycol is around 250,000 tons, and the downstream growth rate is still relatively slow.
It is expected that the short-term domestic ethylene glycol market may destock in mid-August and September. In August, with the maintenance of some devices, the downstream may enter the stocking stage, and the inventory may decline slightly, which may drive the price slightly higher. It is expected to be high. The price is hovering around 4600-4800 yuan/ton; September will enter the ideal period of destocking, and the price is expected to continue to rise. However, due to the impact of increased supply, it is not easy for the price to rise sharply. Most of the price will rise slightly, and is expected to be around 4800-5200 yuan. / ton range.
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