The trends of various commodities in the futures market have become more divergent in recent times, and generally speaking, they are mainly bearish. Ethylene glycol, as a key product in the chemical sector, has led the market down in the past two days. The market has been relatively pessimistic, and there are signs of a vague downward trend. In addition, it is already at a relatively high level, which has also caused concerns among many investors. In the future, how will the price of ethylene glycol go? Can it break through to new highs again? As of the close on Tuesday, June 8, 2021, the main ethylene glycol futures 09 contract was quoted at 4,775 yuan, a decrease of 3.26%.
Domestic production is expected to put pressure, and overseas reductions may be followed up
Analysis of ethylene glycol supply, domestic perspective , information shows that Zhenhai Petrochemical’s ethylene glycol unit restarted as scheduled last week; Satellite Petrochemical’s new unit is operating smoothly and is now mainly supplying finished products to the market; Zhejiang Petrochemical’s 800,000 tons/year ethylene glycol unit has recently put in materials, and will pay attention to whether there will be finished product output in the future . In addition, Hubei Sanning’s 600,000 tons/year ethylene glycol unit is expected to be put into production in the near future. It can be seen that all are expected to be put into production, which may put pressure on prices.
However, in contrast, overseas load reductions have slightly followed up in the later period. According to relevant statistics, in terms of imports, there have been recent maintenance and load reduction actions for equipment in Taiwan, Japan, and the United States. In the third quarter, B2 Alcohol imports are expected to decline. Taken together, the expected start-up of domestic production has added to the upward pressure on ethylene glycol prices. However, considering that overseas burden reductions have been followed up, the pressure on subsequent supply may gradually decrease.
Demand has dropped in the off-season, and the downstream pull effect is not effective
From the perspective of the downstream demand side of ethylene glycol, there has been a year-on-year decrease. First of all, the recent polyester operating rate has reached 90.8%, down 1.7% from before; the terminal weaving operating rate has reached 81%, which is about 2% lower than before; polyester filament inventory has also dropped compared with before.
Considering that the terminal is still in the off-season, the atmosphere for gray fabric shipments is divided and the inventory of weaving mills is high. Since polyester filament factories have promised not to promote sales before the Dragon Boat Festival, downstream weaving companies tend to stock up on polyester around the Dragon Boat Festival. Although polyester factories destocked slightly last week, the operating rate of looms has continued to decline recently, and the inventory pressure on the polyester end is still high. The polyester operating rate dropped to 90.8% this week. It is reported that there will still be follow-up maintenance of some short fiber factories, and it is expected that the polyester operating rate may gradually drop to around 90%. Overall consideration, the demand side of ethylene glycol has weak momentum to pull down prices.
Low inventory provides support, and price elasticity is worth looking forward to
In terms of ethylene glycol inventory, the recent ethylene glycol inventory in East China ports is 459,600 tons, a decrease of 0.6 thousand tons from last week’s 460,200 tons, a decrease of 0.13%. On the ethylene glycol inventory side, it is difficult to see accumulation expectations, and the low inventory status may continue.
Based on the above point of view, in the short term, due to the dual impact of supply pressure from the expected commissioning of domestic devices and the limited demand-boosting effect in the off-season, ethylene glycol The price trend is weak, and it is expected that the short-term trend will still be weak. In the medium to long term, with the improvement of external supply pressure and the support of low inventory status, ethylene glycol prices will still have the momentum to rise in the future. </p
