Since December 2021, the international crude oil price has rebounded in shock. Recently, it has started a rapid rebound, returning to around US$80/barrel. At the same time, several domestic units have been shut down for maintenance. Under the support of short-term benefits on the cost side and supply side, the ethylene glycol market has The price rebounded to 5,180 yuan/ton, hitting a high since December.
Last week, crude oil production in North America was affected by cold weather, and geopolitical factors are also affecting the supply of the oil market. At a time when there is no substantial progress in the negotiations on the Iran nuclear deal, the weak performance on the supply side is considered difficult to match the growth in fuel demand. This has fueled the recent strong rebound in oil prices.
In terms of supply, Zhejiang Petrochemical’s 2#800,000-ton ethylene glycol unit was recently shut down for maintenance at the beginning of January and plans to restart at the end of the month; Yangzi Petrochemical’s 300,000-ton/year unit was shut down for maintenance on January 10 due to equipment reasons and is expected to restart on January 22; Xinjiang Tianying’s 150,000 tons/year unit was parked nearby on January 6 and is expected to undergo maintenance for about two months. As of now, the overall operating rate of domestic ethylene glycol units is around 54%, which is lower than the previous period. Port inventory continues to accumulate. As of today, the inventory at the main port in East China is around 703,000 tons, an increase of 27,600 tons from the previous period. The upward pressure on the market has increased.
Taken together, under the situation of poor domestic ethylene glycol profitability, high costs provide strong support to the market. At the same time, it is difficult for the supply-side operating load to increase significantly, giving the market a certain degree of confidence. However, the current port inventory continues to accumulate, and the market still has upward pressure. , it is expected that the market rebound space will be limited in the short term, and there are expectations of a pullback.
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