Recently, the price of ethylene glycol has continued to rise, and the futures market has reached a new high for the year. As of yesterday’s noon closing, the main contract EG2201 of the Dalian Commodity Exchange closed at 5,442 yuan/ton, an increase of 132 yuan/ton from the settlement price on the previous trading day. Up to 2.49%.
Under the strong rise in futures, the spot market price of ethylene glycol has also risen. As of yesterday, the spot price in Zhangjiagang area was around 5,500 yuan/ton. , with a daily increase of 1.29%, an increase of 3.00% compared with the same period last week. The spot price of ethylene glycol in South China is 5,400-5,450 yuan/ton, up 3.81% from last week.
The recent significant fluctuations in the ethylene glycol market should be viewed from the following points.
1. Production in the Gulf of Mexico is slowly recovering and oil prices are rising
U.S. Bureau of Safety and Environmental Enforcement (BSEE) data shows that as of noon on the 13th, 43.6% of the U.S. Gulf of Mexico offshore crude oil production capacity was shut down due to the impact of Hurricane Ida, involving a capacity of 793,500 barrels per day. Natural gas in the region The proportion of production capacity shutdown was 51.61%, involving a production capacity of 1.151 billion cubic feet per day.
As the market was worried about the slow recovery of offshore oil and gas production in the U.S. Gulf of Mexico, which intensified supply tensions, international crude oil futures prices fluctuated higher in the overnight market. They fluctuated strongly in early trading on the 13th and consolidated within a narrow range in the afternoon. International oil prices rose at the close. U.S. WTI crude oil October futures closed up $0.73, or 1.05%, at $70.45/barrel; Brent crude oil November futures closed up $0.59, or 0.81%, at $73.51/barrel. The main SC futures contract closed at 456 yuan/barrel. The market still needs to further clarify the mid- to long-term impact of the epidemic, and until this becomes clearer, most assets, including oil, are likely to continue to trade sideways. The cost side continues to have strong support, and the market price of ethylene glycol rises.
2. Thermal coal prices rise, reducing enthusiasm for starting construction
Since February this year, due to the tight supply situation, the prices of coal products have been rising frequently, setting new high records. As of September 13, thermal coal futures opened higher and moved higher. As of the close, the main contract 2201 closed up 2.26% at 988 yuan/ton. Recently, policies to increase production and ensure supply have been implemented, and coal supply has improved. The demand for replenishment in downstream industries is good, customers are actively looking for goods, and sales in main producing areas are good. Production and sales are basically maintained. However, the overall supply is still in a tight state, and coal prices Continue to run at a high level.
The continued rise in coal prices has brought greater cost pressure to coal-based ethylene glycol companies, directly weakening the industry’s enthusiasm for starting operations. Coal-based companies have frequently stopped operations since the end of the second quarter. In June, the operating rate of coal-to-ethylene glycol fell below 45%, a month-on-month decrease of 19.95%; in July, the operating load was reduced again, with the monthly average operating rate less than 40%, a month-on-month decrease of 11.17%. As the price of ethylene glycol continues to rise, the start-up situation of the coal-to-ethylene glycol industry has improved, but it is still at a low level. Manufacturers are not enthusiastic about starting high-load operations. The current start-up of coal-to-ethylene glycol remains at around 4.50%, resulting in The supply of circulating goods continues to be tight. Due to the low coal production operating rate, it is difficult to significantly increase the overall domestic output.
3. Typhoon “acts strange”, low inventory at ports
Affected by Typhoon Sandu, the 14th this year, many ports were closed to navigation on the 13th. Transport ships were parked in rivers for safety, and unloading was blocked. However, it did not last long and returned to normal soon. Overseas installations frequently experience problems. In the Middle East, due to insufficient supply of raw materials, low production capacity, tight containers and rising shipping costs, ethylene glycol imports have been low this year. The volume of cargo arriving at ports is expected to decrease significantly this week. From September 13th to September 19th, the estimated arrival volume in East China is 127,000 tons, including about 70,000 tons in Zhangjiagang, about 34,000 tons in Taicang, about 15,000 tons in Jiangyin, and Shanghai About 8,000 tons.
From the perspective of port inventory, the inventory in East China on September 13 was 589,000 tons, an increase of 37,000 tons from the same period last week, but it can be seen from the data over the years Output has been at a low level, and it is difficult to see a significant accumulation of inventory this year. The supply side will continue to be tight for a long time.
4. Implementation of dual control policy, polyester industry production reduction
Recently, due to the dual impact of dual control and environmental protection in Jiangsu Province, the Provincial Energy Conservation Supervision Center divided into three groups to go to Nantong, Huai’an, Yancheng, Yangzhou, Zhenjiang, Taizhou, Suqian and other places to conduct energy inspections. Supervision and inspection will be carried out in the consumption intensity level one warning area. It is reported that Nantong has suspended about 45,000 jets and 20,000 rapiers for about 20 days. It will restart after October. The next stop will be Huaian, Yancheng, Yangzhou, Zhenjiang, Taizhou, Suqian and other places. The impact of dual control factors has created greater uncertainty on the demand side, and the polyester industry has once again entered a state of production reduction. Recently, Jiangyin Sanfangxiang and Jiangyin Huahong polyester staple fiber plants have stopped operating 200,000 tons each, totaling 400,000 tons. The industry resumes operationsto around 69%. At the same time, the 200,000-ton polyester filament installation in Sanfangxiang has been shut down. Fujian Jinlun filament and staple fiber plans to shut down the 200,000-ton production capacity on September 15. Polyester bottle flakes have also been affected by the dual control policy. Sanfangxiang bottle flake production has been reduced by 30%, and the Yizheng Chemical Fiber polyester bottle flakes device is expected to be shut down for one month of maintenance in October.
Recently, polyester sales promotions have performed poorly, and factory inventory has been difficult to release. Under the influence of dual controls, it is difficult to concentrate on stocking during the Mid-Autumn Festival and National Day. According to market understanding, This year’s autumn and winter orders have been placed one after another since May, causing the industry to peak during the off-season, but the real “Golden Nine and Silver Ten” are not prosperous. Even if some orders are backfilled in the later period, there will not be the peak season situation in previous years, and the overall demand side will be weak. support.
Taken together, the current supply and demand balance of ethylene glycol is maintained, and there are many uncertainties in foreign installations. It is difficult to increase import volume, and East China port inventories will remain at low levels for a long time. Domestic coal-based parking devices are expected to be supplied in late September. The short-term spot level remains tight, which is good for support. The domestic downstream polyester industry has reduced production and burden. It has become a fact that the peak season is not prosperous, and the demand side is weakly supported. It is expected that the ethylene glycol market will adjust within the high price range in the short term. In the long term, high prices will hardly have substantial support, and a correction is expected. </p
