Supply Side Eased, Ethylene Glycol Rising?

Recently, the market performance of ethylene glycol in China is relatively strong. Last week, when the price rose 110 yuan per ton, it rose again on Monday, and the increase in the market was over 2%. At present, in the short supply pressure of the supply side, the spot market is relatively active, so that the market of ethylene glycol has seen a "100 years' rare" upsurge in the market.

Port inventory continues to decline

Since the beginning of this year, the supply of glycol in China has been ample, leading to high inventory in main ports. However, in recent years, the price of domestic glycol market has risen slightly, due to the decrease of cargo in port. By the end of July 18th, the port port of East China's ethylene glycol inventory was about 983 thousand tons, a total of 48 thousand and 800 tons a week.

This week, the main port volume of ethylene glycol is close to 157 thousand tons. However, due to typhoon factors, some ports have been berthing recently, and the shipment is good recently, and the expected rate this week will continue to decline.

Corporate profits are still losing money.

By the end of July 17th, the main port of East China had gone to a large warehouse, and the market price had been steadily strengthened. The profitability of various process glycol producers has improved to varying degrees, but the profits of enterprises are still in deep water.

The recent trend of raw coal and naphtha is weak, and the repair of coal glycol enterprises and integrated devices is more obvious. Among them, the cash flow from coal to ethylene glycol is -965 yuan / ton; the cash flow of methanol to ethylene glycol is -1459.8 yuan / ton; the ethylene production of ethylene glycol is -120 US dollars / ton; the cash flow of naphtha to ethylene glycol is -27.25 US dollars / ton.

Downstream demand is hard to say.

Judging from the industry chain, the biggest change in recent years is polyester, which has lost profits at present, and its stock has been higher than the previous level (and this year's trend is rising. Last year it is declining). From the data, we can draw a conclusion that polyester prices are not very good at present, so its price is hard to rise. But because of the strong price of raw materials, it has led to passive losses. We are looking at the downstream weaving end. The weaving rate of downstream weaving is in a downward trend, so weaving is faced with the same problem as polyester (loss, inventory).

To sum up: this week, the port still has a certain reduction in Treasury expectations, although the polyester end inventory continued to accumulate, but the overall inventory remained neutral, and there was little room for further negative reduction, and the contradiction between supply and demand turned to positive. It is expected that the domestic ethylene glycol Market will continue to rebound in the short term, and the interval will be between 4350-4500 yuan / ton.

But in the long run, supply side pressure is expected to continue to highlight. The oversupply of ethylene glycol is expected to change the overall trend. (source: Guo Ye net, polyester Jincheng Road)