On the 15th, the main trend of ethylene glycol was relatively strong, rising nearly 2% at one time. It gave up the gains in the afternoon and closed at 5,254 yuan, up 0.42%. Due to poor profits, the operating rate of ethylene glycol units remains low, and market supply is expected to remain weak. At the same time, there is good buying momentum on dips, which boosts the market’s strength.
After the Dragon Boat Festival, PTA, which is also a polyester raw material, saw a rise of 1,000 yuan. Ethylene glycol was affected by low demand and high inventory, and struggled to follow the rise after the holiday. However, the increase this week exceeded that of PTA and short fiber.
Since the end of March and the beginning of April, the domestic polyester production load has dropped rapidly to below 80%. Since then, the Asian Games have been postponed, overseas orders have been tepid, and the overall inventory of polyester factories is relatively high. The load of polyester has been slowly increasing. As the epidemic situation improves in various places, the operating load of downstream polyester has slowly increased. However, as the increase in raw materials has accelerated recently, downstream losses have intensified. There are once again rumors in the market that polyester giants are jointly negotiating to reduce production.
On the supply side, after a wave of centralized maintenance and load reduction at coal plants, the operating rate fell again. Inventories at the main port also saw a wave of reductions after the holiday. However, the amount of goods arriving in the later period is still large, and the inflection point of destocking remains to be seen. Data show that as of Monday, the inventory of ethylene glycol samples in East China’s main port: 1.1481 million tons, a decrease of 1,700 tons from the previous cycle and a month-on-month decrease of 0.15%. There were relatively few arrivals this week, the demand side was relatively stable, and inventory at the main ports in East China was reduced within a narrow range.
Longzhong Information believes that there are still many sets of equipment planned to be put into production in the second half of the year. With low profits and high inventories of downstream polyester, it is difficult to increase the burden, and the weak supply and demand pattern in the medium and long term is difficult to change. Taken together, short-term cost support coupled with phased improvements in supply and demand have led to a strong market trend. In the medium to long term, weak expectations remain.
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