In the near future, the price trend of rare earth in China has remained stable. Near the Spring Festival holiday, the trading atmosphere in the market is light. The price trend chart of some rare earth products in China:

In recent years, the price trend of domestic heavy rare earth market is stable, as of the 21st day, the price of dysprosium oxide is 1.7 million yuan / ton; the price of dysprosium ferroalloy is 1.685 million yuan / ton; the price trend of domestic light rare earth market is stable, as of the 21st day, the price of neodymium oxide is 292000 yuan / ton, the price trend is stable; the price of praseodymium neodymium alloy is 358000 yuan / ton, the price trend is stable; the price of praseodymium neodymium oxide is 279000 yuan / ton, the price is stable The price of neodymium is 367500 yuan / ton. In the near future, the price trend of domestic rare earth market is stable. Affected by favorable national policies, the domestic rare earth market remains high.

On January 20, the rare earth index was 338, unchanged from yesterday, 66.20% lower than the cycle’s highest point of 1000 (2011-12-06), and 24.72% higher than the lowest point of 271 on September 13, 2015. (Note: cycle refers to 2011-12-01 to now).

In recent years, the market price of rare earth has stopped falling and stabilized. According to statistics, the export volume of domestic rare earth market in December increased significantly. The export volume of China’s rare earth in December was 3657.3 tons, an increase of about 38.7% compared with the export volume in November. The significant increase in export volume is good for the domestic rare earth market, and the domestic rare earth price trend remains high. In addition, in the near future, the demand for permanent magnet remains high, the market trend of praseodymium and neodymium series products rebounds, the on-site supply is normal, the recent demand for light rare earth is general, and the market price changes little. The price fluctuation of rare earth market is related to the national environmental protection supervision. Rare earth production has particularity, especially some products have radiation hazards, which makes the environmental protection supervision more strict. Under the strict inspection of environmental protection, the manufacturer reasonably controls the sales, but the downstream demand has not changed much in the near future, and the price trend of most rare earths is mainly stable.

Geng Shuang, a spokesman for the former foreign ministry, said that China is the world’s largest country in rare earth reserves and production, and plays an important role in the global rare earth industry chain. China has always adhered to the principle of openness, coordination and sharing, promoted the development of domestic rare earth industry, and is willing to use rare earth resources and products to meet the legitimate needs of the development of all countries in the world, so as to promote China’s economy and the world Economic development plays an active role. China’s rare earth production accounts for 73% of the world’s total, ranking first in the world and playing an important role in the game between big countries. The export volume of domestic rare earth products has increased, which is good for the market price of domestic rare earth. Recently, the Ministry of industry and information technology and the Ministry of natural resources jointly issued a notice to release the total amount control indicators of rare earth mining and smelting separation and tungsten mining in 2019. The Ministry of industry and information technology of China announced that the total amount of rare earth mining and smelting separation in 2019 was 132000 tons and 127000 tons respectively, while the quota of rare earth mining in 2018 was 120000 tons, an increase of 12000 tons, and 2019 is the highest year since 2014. In addition, the Ministry of industry and information technology, together with relevant departments, drafted the development plan of new energy vehicle industry (2021-2035). After 15 years of continuous efforts, China’s core technology of new energy vehicles will reach the international leading level. By 2025, the proportion of new energy vehicle sales will reach about 25%. Driven by national policies, the supply and demand pattern of rare earth industry is expected to further improve, and China’s domestic demand is expected to further improve The price of rare earth in the domestic market remained high and volatile.

Rare earth analysts of business agency expect that the recent domestic environmental protection scrutiny will not be reduced, coupled with favorable domestic support for the export of rare earth industry, and the supply and demand pattern is improving in a good way. It is expected that the price of heavy rare earth in the rare earth market will remain high after the Spring Festival, and the trend of light rare earth market will be improved.

1、 Price trend

According to the data monitored by the business agency (average ex factory price of SG5 of carbide method), the average price of domestic PVC mainstream on January 21 was 6825 yuan / ton, which was flat compared with the previous day, and the market was temporarily stable, up 7.48%%% compared with the same period last year. On January 21, the PVC commodity index was 86.48, unchanged from yesterday, down 13.52% from the highest point in the cycle, 100.00 (2011-09-05), and up 48.41% from the lowest point, 58.27, on December 20, 2015. (Note: cycle refers to 2011-09-01 to now)

2、 Market analysis

Products: near the Spring Festival, PVC market trend is stable. In recent days, the spot market has been light in trading, downstream factories have been on holiday, the intention to prepare goods before the festival is light, there are not many sporadic replenishments, and the traders continue to withdraw from the market, market transactions tend to stagnate. At present, the social inventory of PVC continues to increase, and the operation rate of upstream PVC factories decreases. The inventory increase during the Spring Festival holiday may be lower than that of the same period last year, and the enterprises are facing certain pressure. In the demand side dominated situation, PVC spot price trend is weak. According to the data monitoring of business agency, as of January 21, the main quotation range of domestic PVC is 6600-6950 yuan / ton. At present, the mainstream price of pvc5 carbide in Changzhou district is 6850-6950 yuan / ton, the interval price of pvc5 carbide in Hangzhou district is 6750-6950 yuan / ton, and the mainstream price of PVC ordinary carbide in Guangzhou district is 6850-6920 yuan / ton. The real deal can be negotiated.

Futures: on Monday, PVC main v2005 contracts were narrowed, closing at 6470 yuan / ton, compared with – 5 yuan on the previous trading day; trading volume was 68333 hands, + 10569 hands; positions were 197607 hands, – 4819 hands, basis difference was 280 yuan, + 5 yuan; 5-9 price difference was 40 yuan, + 20 yuan. Futures closed up 10 at 6490.

News: on January 17, the National Bureau of statistics released data on investment and sales of real estate development nationwide from January to December 2019. Accordingly, in 2019, the national real estate development investment was 13219.4 billion yuan, an increase of 9.9% over the previous year, and the growth rate was 0.4 percentage points higher than the previous year. Among them, residential investment reached 9707.1 billion yuan, an increase of 13.9%, 0.5 percentage points higher than the previous year. The new construction area changed from negative to positive year on year, showing a positive trend.

Industry chain: disturbed by various news, although the US Iraq conflict temporarily released the easing signal, the contradiction still exists, and there is certain uncertainty in the direction of the situation. In the short term, crude oil will continue to fluctuate broadly, and ethylene market will rise. As for calcium carbide, the capital return of each factory is in good condition, the equipment maintenance is completed, the production capacity is increased, and the price is slightly increased.

Industry: according to the price monitoring of the business agency, on January 20, 2020, there was a total of one kind of commodities in the list of commodity price rise and fall, with PA66 (0.09%) rising. There are two kinds of commodities falling on a month on month basis, the first two products falling are PP (- 1.53%) and natural rubber (- 0.24%). The average price of this day was – 0.11%.

3、 Future forecast

PVC analysts of the business club believe that: near the Spring Festival, the factory’s operating rate is at a low level, and it is difficult to make a big change in the downstream demand end, so it is expected that PVC will run smoothly before the festival.

Trade name: sulfur

Latest price (January 21): 503.33 yuan / ton

Key points of analysis: the domestic sulfur market is stable and the atmosphere is quiet. As the Spring Festival holiday approaches, the quotation of various regions in China is stable. The mainstream price of solid sulfur in East China of Sinopec is 520-610 yuan / ton, and the mainstream price of liquid sulfur is 490-580 yuan / ton; the mainstream price of solid sulfur in North China is 400-440 yuan / ton, and the mainstream price of liquid sulfur is 380-420 yuan / ton; the mainstream price of solid sulfur in Shandong is 480-510 yuan / ton, and the mainstream price of liquid sulfur is 400-450 yuan / ton.

At present, the port inventory is high, consumption is slow, the atmosphere of on-site negotiation is cold, and the market performance is quiet. The downstream sulfuric acid market maintains stable operation. The price of the mainstream sulfuric acid manufacturers in Shandong Province is temporarily stable. The inventory of manufacturers is small, the downstream demand is general, and the sulfuric acid market is dominated by low consolidation.

Future market forecast: at present, the domestic sulfur market is quiet, the port is still high in inventory and slow in consumption, the contradiction between supply and demand is still the same, the Spring Festival holiday is coming, the on-site operators are mainly cautious and wait-and-see, and the sulfur market is weak and stable.

Us WTI crude oil February futures rose $0.59, or 1%, to $59.17 a barrel on Monday (January 20), and will not close today due to the US holiday. Brent crude oil futures closed up $0.65, or 1 percent, at $65.50 a barrel on Monday. Crude oil supply in the Middle East is at risk and the morale of crude oil bulls is encouraged. WTI crude oil futures in the U.S. peaked at $59.66/barrel, while Brent crude oil futures peaked at $66.00/barrel.

Fundamentals positive factors:

Iraq’s al Ahdab oil field was forced to shut down, with an average daily production of 70000 barrels / day as protests intensified. At the same time, Libya’s two major oil fields were forced to close because of the closure of an important pipeline.

According to the latest monthly report released by the International Energy Agency (IEA) on Thursday (January 16), the growth expectation of global crude oil demand in 2020 will remain unchanged, maintaining 1.2 million barrels / day. IEA said there are risks in Iran’s crude oil supply, mainly affected by the situation in the Middle East. U.S. economic sanctions against Iran and domestic protests threaten the country’s oil supply. It is worth noting, however, that internal security problems in Iraq are limiting the country’s production plans, which may make it difficult for global crude oil supply to meet long-term demand growth. At the same time, crude oil demand of OECD member countries is expected to decrease by 115000b / D in 2019, but it is expected to increase by 275000b / D in 2020, due to the improvement of GDP growth and the decrease of trade risk.

U.S. crude oil inventories fell 2.549 million barrels to 425.5 million barrels in the week ended January 10, according to a report released by the U.S. Energy Information Agency (EIA) on Wednesday, with the market predicting a decrease of 343000 barrels.

According to the latest survey released on Monday (January 6), crude oil production of the organization of Petroleum Exporting Countries (OPEC) fell in December due to Nigeria and Iraq’s more strict compliance with the production reduction agreement, and Saudi Arabia, the main exporter, further cut crude oil production before the new production restriction agreement was reached. According to the survey, OPEC’s crude oil production last month was 29.5 million barrels per day. It’s down 50000 BPD from the revised figure in November. Improvements in Nigeria and Iraq, which had previously failed to meet production reduction commitments, helped the implementation rate rise from 153 per cent in November to 158 per cent in December.

Fundamentals negative:

The International Monetary Fund’s optimism about global economic growth has declined, warning that the outlook for the global economy remains weak and there is no clear sign of a turning point. In the latest world economic outlook report, the IMF lowered its forecast of global economic growth to 3.3% in 2020, 3.4% in October last year, and 2.9% in 2019, 3% previously. The main reason for the downward correction is the slowdown in India’s economic growth. The global economic growth rate is expected to be reduced to 3.4% in 2021 and 3.6% in October last year

Data released by Baker Hughes on Friday (January 17) showed that the number of active US oil wells increased by 14 to 673 in the week ending January 17, the first increase in four weeks. There were 852 in the same period last year. According to the latest EIA report, the growth rate of US crude oil production is expected to slow to 3% in 2021, the lowest since 2016. At that time, crude oil production in the United States recorded a decline, while in 2019, it increased by 18% to a record high of 12.2 million barrels / day. Meanwhile, US crude oil production is expected to further climb 9% to 13.3 million barrels / day in 2020.

Crude oil inventories in Cushing, Oklahoma, rose 342000 barrels last week in the week ended January 10, after falling for nine consecutive weeks, according to a report released by the EIA on Wednesday. U.S. refined oil inventories rose 8.171m barrels, a three-week increase, with the market predicting an increase of 2.477 million barrels. U.S. gasoline inventories rose 6.678 million barrels, a 10 week increase, with the market predicting an increase of 3.642 million barrels. In addition, domestic crude oil production in the United States last week increased by 100000 barrels to 13 million barrels per day, a record high.

The organization of Petroleum Exporting Countries (OPEC) said on Wednesday (January 15) that despite the increase in global demand, OPEC expects the organization’s crude oil market demand to decrease in 2020, as competitor production growth will grab market share and the United States is expected to set another production record. In its market report, OPEC predicted that in recent years, driven by shale gas, U.S. crude oil production has soared, and the total U.S. crude oil production is expected to break the milestone of 20 million barrels / day for the first time. Meanwhile, OPEC said that in the fourth quarter of 2020, the total output of crude oil and liquid fuel in the United States will reach 20.21 million barrels / day, almost meeting the demand of 21.34 million barrels / day in the United States. OPEC, on the other hand, has raised its forecast for supply growth in non OPEC oil producing countries in 2020, which is expected to increase by 180000 barrels per day to 2.35 million barrels per day from 1.86 million barrels per day in 2019.

The US Energy Information Agency (EIA) pointed out in the short-term energy report that the US crude oil production is expected to increase by 1.06 million barrels / day to 13.3 million barrels / day in 2020, higher than the previous expectation of 13.18 million barrels / day. In 2021, the crude oil production of the United States is expected to further increase by 410000 barrels / day to 13.71 million barrels / day.

1、 Price trend

According to the monitoring data of the business association, the average ex factory price of domestic grade 52 chlorinated paraffin on January 13 was 4933 yuan / ton, and the average ex factory price of domestic grade 52 chlorinated paraffin on January 20 was 4933 yuan / ton, which was stable this week. Up to now, the commodity index of chlorinated paraffin on January 20 is 73.45, which is the same as yesterday, 32.88% lower than the highest point of 109.43 (2013-12-03), and 15.04% higher than the lowest point of 63.85 on September 26, 2016. (Note: cycle refers to 2012-06-01 to now)

2、 Market analysis

Product: low level of chlorinated paraffin at present. The ex factory price of grade I chlorinated paraffin 52 in South China is 4600-5500 yuan / ton, the ex factory price of grade I chlorinated paraffin 52 in North China is 4600-5500 yuan / ton, the ex factory price of grade I chlorinated paraffin 52 in East China is 5200 yuan / ton, the ex factory price of grade I chlorinated paraffin 52 in Central China is 4700-5500 yuan / ton, and the ex factory price of grade I chlorinated paraffin 52 in Northeast China is 4700-5500 yuan / ton. The ex factory quotation of grade I chlorinated paraffin 52 in Shandong Province is about 4800-5500 yuan / ton. The ex factory quotation of grade I chlorinated paraffin 52 in Northwest China is about 4800-5500 yuan / ton.

Industry chain: the market price of raw material liquid wax is stable, the order is rare, the market atmosphere is light, more rigid goods need to be taken, the market has no obvious change. Most of the liquid chlorine market maintained stable operation, with prices rising in Shandong and parts of North China and limited space for adjustment.

Industry: according to the price monitoring of the business agency, there are 20 kinds of commodities rising month on month in the second week of 2020 (1.13-1.17) in the list of commodity prices rising and falling in the chemical industry sector, the top three commodities rising are acetone (4.08%), acetic acid (3.92%) and dichloromethane (3.63%). There are 24 kinds of commodities falling on a month on month basis, with 2 kinds of commodities falling by more than 5%, accounting for 2.4% of the number of commodities monitored in the sector; the top three products falling are glycol (- 5.93%), propane (- 5.26%), and ammonium chloride (- 3.91%). This week’s average was – 0.08%.

3、 Future forecast

Chlorinated paraffins analysts believe that the current approaching Spring Festival, downstream demand weakened, new single transactions limited, manufacturers mainly steady finishing. It is expected that the chlorinated paraffin market will run horizontally before the festival, and it is suggested to pay attention to the change of raw materials.

1、 Price trend

According to the data in the business club’s large scale list, the average ex factory price of powdered monoammonium on January 13 was 1906 yuan / ton, and the average ex factory price of powdered monoammonium on January 20 was 1890 yuan / ton, with a drop of 0.87% this week. On January 20, the monoammonium phosphate commodity index was 63.26, unchanged from yesterday, 37.27% lower than the cycle’s highest point of 100.84 (2011-09-13), and 1.88% higher than the lowest point of 62.09 on September 19, 2017. (Note: cycle refers to 2011-09-01 to now)

According to the data in the business club’s large scale list, the average ex factory price of 64% diammonium on January 13 was 2200 yuan / ton, and the average ex factory price of 64% diammonium on January 20 was 2200 yuan / ton. The price remained stable this week. The diammonium phosphate commodity index on January 20 was 65.62, which was the same as yesterday, a new low in the cycle, 36.28% lower than the highest point of 102.98 on October 8, 2011. (Note: cycle refers to 2011-09-01 to now)

2、 Market analysis

Monoammonium phosphate: this week monoammonium phosphate stable small and medium-sized drop, enterprise operating rate of about 40%. The factory quotation of 55% powdered ammonium in Anhui Province is 1850-1950 yuan / ton, and the commencement is stable. In Hubei Province, the factory price of 55% powdered ammonium is 1850-1950 yuan / ton, and that of 60% powdered ammonium is 2000-2100 yuan / ton. The market in Henan Province has maintained stable operation, and 55% of ammonium powder has been quoted at about 1850 yuan / ton, with stable start-up. The ex factory quotation of 55% powdered ammonium in Shandong Province is 1900-2050 yuan / ton, and the price is stable. The ex factory quotation of 55% powdered ammonium in Sichuan is about 1900 yuan / ton.

Diammonium phosphate: this week, diammonium phosphate is running steadily, and the enterprise’s operating rate is about 50%. At present, 64% of the mainstream of diammonium in Hubei Province offers 2200-2300 yuan / ton, 64% of the mainstream of diammonium in Shandong Province 2250-2350 yuan / ton, 64% of the mainstream of diammonium in Yunnan Guizhou Province 2300-2450 yuan / ton, and 64% of the mainstream of diammonium in Anhui Province 2300-2450 yuan / ton.

Industry chain: this week, the phosphorus ore market is stable, the market is light, the downstream is sporadically replenished, and the market atmosphere is heavy. At present, the demand of the phosphorus ore market in Guizhou Province is low, and the price of 30% ammonium phosphate ore truck plate is around 320-360 yuan / ton; the phosphorus ore market in Yunnan Province is stable, and the price of 28% ammonium phosphate ore truck plate in Yunnan Province is 270-290 yuan / ton; the price of 30% grade phosphate ore in Guangxi Province is factory price Grid reference is around 325-360 yuan / ton. The sulfur trend this week was stable. On January 20, the mainstream price of solid sulfur and liquid sulfur in Sinopec Shandong was 480-510 yuan / ton and 400-450 yuan / ton respectively. The mainstream price of solid sulfur in Sinopec North China is 400-440 yuan / ton, and the mainstream price of liquid sulfur is 380-420 yuan / ton.

Industry: according to the price monitoring of the business agency, there are 20 kinds of commodities rising month on month in the second week of 2020 (1.13-1.17) in the list of commodity prices rising and falling in the chemical industry sector, the top three commodities rising are acetone (4.08%), acetic acid (3.92%) and dichloromethane (3.63%). There are 24 kinds of commodities falling on a month on month basis, with 2 kinds of commodities falling by more than 5%, accounting for 2.4% of the number of commodities monitored in the sector; the top three products falling are glycol (- 5.93%), propane (- 5.26%), and ammonium chloride (- 3.91%). This week’s average was – 0.08%.

3、 Future forecast

According to analysts of business association ammonium phosphate, the Spring Festival is approaching, the market supply is strong and the demand is weak, the downstream enthusiasm of ammonium phosphate is poor, and the manufacturers mostly execute the early orders. It is expected that the monoammonium market will continue to operate in a weak position in the later period, and the low level of diammonium will be consolidated, and the overall market of ammonium phosphate will remain stable before the festival.

On January 20, the hydrogen peroxide commodity index was 113.04, down 9.79 points from yesterday, 47.90% from 216.98 (2017-12-24), and 57.57% higher than 71.74, the lowest point on August 3, 2016. (Note: cycle refers to 2011-09-01 to now)

According to the monitoring of the business agency: near the Spring Festival, the hydrogen peroxide market staged a sharp decline. At the beginning of January, the average price of 27.5% hydrogen peroxide will be 1106 yuan / ton. On January 20, the average price of hydrogen peroxide will be 1040 yuan / ton, down 7.96% from the beginning of the week and 6.02% from the beginning of the month.

market analysis

On the eve of the Spring Festival, most hydrogen peroxide manufacturers had no downtime plan for the time being. The supply was loose and the inventory was increased. Before the festival, in order to reduce the inventory of some manufacturers, the price of hydrogen peroxide in Hebei dropped by 230 yuan / ton on the 20th and the quotation dropped to 770 yuan / ton. The main price in Shandong Province dropped by a relatively small margin: 1050 yuan / ton, 40 yuan / ton, stable in Anhui Province, 1300 yuan / ton, 1150 yuan / ton in Hangzhou, 50 yuan / ton, 1150 yuan / ton, and 100 yuan / ton in Hunan Province.

As of January 20, the quotation of hydrogen peroxide in each region is as follows:

Shandong Province: the hydrogen peroxide plant of Luxi Chemical Co., Ltd. was started normally, and did not shut down during the Spring Festival. The price of 27.5% hydrogen peroxide was 1050 yuan / ton, and the price fell 40 yuan / ton.

Hebei Province: Zhengyuan fertilizer Co., Ltd. started its hydrogen peroxide plant normally and did not shut down during the Spring Festival. The ex factory price of 27.5% hydrogen peroxide fell to 770 yuan / ton and the price fell by 230 yuan / ton.

Anhui Province: Anhui Quansheng 27.5% hydrogen peroxide price 1300 yuan / ton, the price is the same.

Hunan Province: Hunan hydrogen peroxide plant was started normally, and did not shut down during the Spring Festival. The price of 27.5% hydrogen peroxide was 1150 yuan / ton, down 100 yuan / ton.

Zhejiang Province: Hangzhou Mingxin hydrogen peroxide plant opened one set and stopped one set during the Spring Festival. 27.5% hydrogen peroxide offered 1150 yuan / ton, and the price dropped 50 yuan / ton.

Industry chain: the price of caprolactam at the end of hydrogen peroxide terminal has improved, but the paper industry, textile and printing industry enterprises have been shut down for holidays, less hydrogen peroxide has been purchased, and the demand has been greatly reduced. Before the festival, hydrogen peroxide enterprises went to inventory, and the prices were mainly down.

Outlook for the future

Hydrogen peroxide analysts of the business club believe that: during the Spring Festival, most hydrogen peroxide enterprises started their work normally, and the supply pressure increased. It is expected that the price rise of hydrogen peroxide will remain under pressure, or will continue to decline in a weak direction.

Affected by the cost side, from the beginning of December 2019 to now, the pta2005 contract has risen from 4800 yuan / ton to 5150 yuan / ton and then fell back. At present, it hovers around 4900 yuan / ton. For the aftermarket, the author analyzes as follows:

PX excess may increase

In 2019, in addition to the 4.5-million-ton PX super large unit put into operation by Hengli refining, Fuhai will resume production of 1.6-million-ton unit, Liaoyang will expand its capacity by 200000 tons, Sinochem Hongrun’s 600000-ton and Hainan Refining & Chemical’s 1-million-ton new units will be put into operation successively. With the release of new production capacity, PX’s profit has declined from a high level, and some enterprises have been in a state of loss.

From the end of 2019 to 2020, new PX devices are still planned to be put into operation. Hengyi’s 1.5 million ton capacity plant has been opened in November 2019, and Zhejiang Petrochemical’s 4 million ton capacity super large plant is expected to be opened in the first half of 2020. In addition, Saudi Arabia also plans to put into operation a new PX plant with a capacity of 850000 tons. Fuhai group, Sinochem Hongrun, Sinochem Quanzhou phase I, Ningbo CICC, etc. all plan to put PX capacity into operation. The degree of PX supply surplus in Asia may intensify in 2020, and the price difference profit will be further compressed. In the new year, the survival of PX storage devices in Asia is facing a test. Medium and high cost storage devices with a low degree of integration will be forced to cut production and give up market share to new integrated devices, and new devices will also be forced to carry out appropriate output increment control.

PTA new units are put into operation successively

In 2019, the total production of PTA in China was 44.43 million tons, an increase of 9.27% year-on-year. The production in 2020 is expected to be higher than that of last year, mainly due to the high profit of PTA production in the first half of 2019, the overload production of the factory and the large number of units put into operation in that year. By the end of 2019, PTA social inventory exceeded 1.4 million tons, which was at a high level. In the first quarter of 2020, although Yisheng device was overhauled, 1.2 million tons of devices of Zhongtai and Hengli were put into operation successively, and PTA supply capacity is beyond doubt. After the Spring Festival, PTA social inventory will continue to accumulate.

Poor downstream demand

Due to the influence of high production capacity and high starting load, compared with the past two years, the current polyester factory inventory is much higher. As of January 14, the overall inventory of polyester market is concentrated in 10-19 days. Inventory accumulation, low price, polyester factory ahead of the new year. As of January 13, the polyester operating load dropped to 76%, and in the continuous decline, the production capacity has been reduced plus the planned production reduction, totaling more than 12 million tons. This week is the time for weaving factories to have a centralized holiday. The starting load of looms may fall to the lowest point in the year. In addition, in recent years, China’s textile industry is facing a more severe external situation, with its export profit margin falling month on month, and the main export markets, Europe, the United States and Japan, lack of orders.

Poor terminal demand, poor weaving start-up load and fabric price, polyester start-up load and profit, inhibit the downward transmission of price, and even suppress PTA price upward.

Generally speaking, crude oil will boost PTA price in the future, but at present, the logic of oil price operation is not clear, PTA price is under pressure, and it is expected to be weak oscillation.

The rising price stimulates the starting load of glycol unit to rise, and the abundant supply of imported goods in the later period will inevitably put pressure on glycol market, and the price may peak in the later period.

With the Spring Festival approaching, the polyester starting load falls, the terminal weaving starting load is at a new low within the year, and the bearish atmosphere of glycol market heats up.

Production enterprises increase the intensity of commencement

From January to November 2019, due to the oversupply of supply, the price of glycol rose briefly due to the market panic caused by the drone attack in Saudi Arabia in the middle of September, and remained in a low operating state for the rest of the time. Ethylene glycol production enterprises, especially those adopting non ethylene process with high cost, are suffering from continuous deterioration of business conditions and serious losses. Some enterprises are forced to shut down their units to reduce losses. Affected by this, the problem of ethylene glycol supply exceeding demand has been alleviated, and the industry has entered the de stocking cycle. As of January 16, 2020, the ethylene glycol inventory in East China is 353000 tons, which is 886000 tons less than the historical peak on April 25, 2019, a decrease of 71.51%. The inventory has been at a low level for many years, and the market supply and demand pattern has improved. Since December 2019, the price of glycol has risen sharply, up nearly 15%.

With the continuous rise of glycol price, the operation of glycol production enterprises has improved. The gross profit of coal to glycol is 157 yuan / ton, methanol to glycol is – 956.2 yuan / ton, ethylene to glycol is – 63 dollars / ton, naphtha to glycol is – 4.54 dollars / ton. In this case, the start-up load of coal preparation plant is significantly increased. As of January 14, the operating load of non ethylene glycol unit was 74.57%, 29.06% higher than the low point in 2019; the operating load of ethylene glycol unit was 68.85%, 10.48% higher than the low point in 2019. At present, in addition to the long-term shutdown devices and some EO conversion devices, most of the devices have been restored to production, and the supply of domestic market is gradually released.

In the international market, most of the glycol units are in normal operation, and there are few maintenance units, which leads to the relatively low price of imported glycol, and the import arbitrage space reaches 300 yuan / ton. Under the stimulation of profits, a large number of domestic ethylene glycol imports are expected to be concentrated in Hong Kong in the first quarter. The starting load of domestic units has been increased, a large number of imported goods have poured in, and the supply of glycol is sufficient in the future.

After the year, the downstream replenishment may be less than the previous years

Near the Spring Festival, the downstream polyester enterprises have a large area of parking and maintenance, and the starting load of the terminal weaving industry is at a new low in the year. As of January 17, the starting load of polyester enterprises was 77.04%, 2.12% lower than that of the same period in 2019; the starting load of weaving enterprises was 25%, 37% lower than that of the same period in 2019. Of course, the starting load of weaving enterprises is significantly lower than that in 2019, which is largely the reason for the earlier spring festival this year. However, at present, the inventory of polyester enterprises is higher than that of previous years. As of January 16, the POY inventory of filament is 8.5 days, an increase of 4.5 days or 112.5% compared with the same period of 2019; the DTY inventory of filament is 20.5 days, an increase of 11.5 days or 127.7% compared with the same period of 2019; the FDY inventory of filament is 13 days, an increase of 6 days or 85.7% compared with the same period of 2019; the short polyester fiber inventory is 4.96 days, a decrease of 0.04 days or 0.8% compared with the same period of 2019. This means that after the Spring Festival, the replenishment of downstream polyester enterprises may not be as strong as that of previous years, and the demand for glycol will be restrained.

Forecast for future market

Combined with the above analysis, since it is difficult to hedge the supply increase due to the demand increase, the glycol market will return to the stock accumulation cycle, and the price will continue to decline. In terms of operation, short orders in the early stage continue to be held, and investors who do not enter the market can see a rebound

US media said that the organization of Petroleum Exporting Countries (OPEC) pointed out on the 15th that the improvement of the global economic outlook will help accelerate the growth of oil demand in 2020.

According to a report on the Wall Street Journal’s website on January 15, OPEC raised its forecast of global oil demand growth by 140000 barrels a day to 1.22 million barrels in 2020, and raised its forecast of global economic growth to 3.1% in 2020 in this highly focused monthly oil market report.

According to the report, OPEC’s revised oil demand growth forecast mainly reflects the improvement of the economic outlook in 2020, and most of the demand growth is expected to come from developing countries, especially China and India.

A month ago, OPEC and its allies just reached a new production reduction agreement, which will reduce production by another 500000 barrels a day until the end of March 2020, bringing the daily production reduction of the alliance to about 1.7 million barrels. OPEC’s increased production cuts are aimed at easing the impact of the slowdown in global economic growth, which last year had a knock on effect on global oil demand. In this case, OPEC cut its forecast of global oil demand growth in 2019 five times in eight months.

But those who want a more balanced supply and demand for oil may be disappointed. OPEC raised its non OPEC daily supply growth forecast by 180000 barrels to 2.35 million barrels in 2020, citing higher supply growth expectations in Norway, Mexico and Guyana.

Despite a cut in us supply growth expectations, OPEC said other non OPEC oil producing countries, such as the US, Canada, Brazil, Norway and Guyana, would lead global supply growth this year.

The report said that OPEC and its allies reached a further production reduction agreement in December last year, may not be able to curb the aggravation of the global oil supply surplus. Since January, the global benchmark Brent crude oil price has fallen by 3%, and the US crude oil futures price has fallen by 5.3% after a sharp fluctuation in the first week of January.