In the first half of 2022, the domestic ethylene glycol market showed a trend of rising first and then falling. Taking the East China market as an example, the average price in the first half of 2022 was 5,036.23 yuan/ton, down 0.485% year-on-year. The highest price was 5,440 yuan/ton in February, and the lowest price was 4,390 yuan/ton in June.
From a cost perspective, crude oil prices first rose and then fell in the first half of the year, but are still fluctuating at a high level. However, production costs are high, and companies have been in a loss-making situation for a long time. It is difficult to recover in the short term, and integration continues to have low profits.
From the supply side, in the first half of the year, units were affected by the epidemic and weak profits. Some units were converted to reduce production load or shut down for maintenance. At the beginning of the year, Zhenhai Refining Phase II, Xinjiang Guanghui, and Guangxi Huayi put new units into operation, and the new capacity was 190 Around 10,000 tons, the market supply increased. The epidemic broke out in April, transportation was not smooth, and the port’s accumulated inventory exceeded one million. Although some equipment maintenance has been carried out to boost the market, it is difficult to overcome the high inventory and suppress market confidence. As of the end of June, the port’s inventory Inventories rose to a new high of 1.2465 million tons during the year, and shipments in the first half of the year averaged 5,712 tons, down 26.57% from the same period last year.
From the demand side, polyester plants in many factories were shut down for maintenance in the first quarter, and the total market supply was further reduced. Suppressed by low profits, polyester companies gradually reduced production. In addition, the domestic epidemic situation became increasingly severe, and logistics control in various places became stricter. The procurement and shipment of raw materials from ester factories were hampered; in the second quarter, as the epidemic gradually improved, polyester production started to rise, but terminal demand has not yet recovered, so many companies are restocking at dips. In the first half of the year, the performance of the “gold, three, silver and four” markets was mediocre. The peak season was not prosperous, and the off-season was flat as the norm.
From the perspective of import and export, the import volume of ethylene glycol in the first half of 2022 was 4.3377 million tons, which was basically the same as the same period last year. Although the increase in production offsets part of the import volume, due to the lack of cost advantage and product quality reasons, imported sources still occupy a place. Export volume in the first half of 2022 was 24,000 tons, a year-on-year decrease of 75.98%.
Taken together, the supply and demand side of China’s ethylene glycol market in the second half of 2022 will still be the main influencing factor for price fluctuations. The supply and demand relationship in the ethylene glycol market is still difficult to achieve balance. The capacity of newly invested equipment in the second half of the year will be 6.7 million tons. By then, China’s ethylene glycol market will The total glycol production capacity will reach 29.455 million tons. However, the growth rate of downstream polyester production capacity slowed down. In the second half of the year, the new polyester production capacity was around 7.27 million tons/year. The new polyester production required 2.44 million tons of ethylene glycol. Its production capacity growth rate was lower than the expansion rate of ethylene glycol production capacity. , the basic relationship of oversupply is difficult to improve, the market will continue to fluctuate widely, and the overall fluctuation space may not change much compared with the first half of the year. In addition, new ethylene glycol production capacity will increase significantly in the second half of the year, and the supply volume may continue to increase. However, the growth rate of downstream demand is not as fast as expected for ethylene glycol expansion, and the demand for ethylene glycol is limited. The market price in major regions is expected to be 4,500-6,000 yuan/ton, with the high point likely to occur from August to October.
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