On January 3, suleymani, a senior Iranian general, was killed by us air strikes outside Baghdad International Airport. Iran’s top leader, Ayatollah Khamenei, later issued a statement saying that Iran would take “tough revenge” on the incident.
| EDTA |
According to Iranian media reported on the 8th, in the early morning of the 8th local time and the early morning of Beijing time, the “US Assad air base” in Anbar province in western Iraq was attacked by rockets. Iran’s Islamic Revolutionary Guard has launched “dozens of missiles” at the Assad Air Force Base in Iraq, where the U.S. military is stationed.
Affected by this, most of the domestic commodity futures market open red, energy, chemicals soared. Glycol touched the limit plate, fuel oil rose by more than 7%, asphalt rose by more than 5%, and crude oil rose by 3%.
The sharp rise of glycol not only benefits from the peripheral factors, but also has an inseparable impact on its own fundamentals.
The port arrival volume is lower than the expected price by a small increase
The main reason is that the early market thinks that the probability of ethylene glycol accumulating in the later period is relatively large, but due to the influence of weather and other factors, the port is closed, the shipping date is delayed, the arrival of the wharf is still relatively small as a whole, the market inventory is less than expected, which supports the spot market price and causes a small increase in the recent price. According to market news, as of the 8th, due to the strong wind at the wharf, the north channel of the Yangtze River route is closed, the south channel is limited, and Ningbo and Shanghai terminals are closed.
| Melamine |
According to statistics, as of January 6, MEG port inventory in East China’s main port area was about 365000 tons, down 52000 tons from last Thursday, down 12.47%. Among them, Zhangjiagang has 172000 tons, down 8.5% from last Thursday, Taicang has 48000 tons, down 29.41% from last Thursday, Ningbo has 70000 tons, down 17.64% from last Thursday, etc. Compared with the inventory of MEG port in the main port area of East China on January 3, 2019, 785000 tons, a year-on-year decline of 53.5%, nearly half of the inventory has been digested.
Limited market impact of new devices
Recently, new devices such as Rongxin, Zhejiang Petrochemical and Hengli have been successively put into operation, which is basically in the stage of device commissioning, which is difficult to reflect the actual market supply. In terms of specific performance, the commissioning of Hengli petrochemical ethylene glycol has been successfully completed. At present, the unit is shut down waiting for the start-up process of supporting ethylene link; the load of Rongxin MEG unit has been increased to about 50% since the superior products were produced last week; Zhejiang Petrochemical Ethylene has already produced products, and the ethylene glycol commissioning is planned for the first ten days of January. Up to now, the total operating rate of glycol has reached 66.35%, non coal load 63.42% and coal to coal 70.17%. Basically, there is no big change with last week, which is good support for the market, and also the main reason for the high price.
Import volume is the focus of the market in the near future
China is the world’s largest ethylene glycol importer, with an average annual import volume of over 7.5 million tons in the past five years. However, with the rapid development of domestic coal chemical industry, the increase of glycol supply in the market has led to the decline of glycol import in China. According to statistics, from January to October 2019, China imported 8.23 million tons of glycol, down from 8.3 million tons in the same period of 2018. In the first half of 2019, domestic import dependence is still 55.49%.
The import volume of glycol from the Middle East of China has reached 60%, of which Saudi Arabia ranks first. According to the data from January to July 2019, 45% of domestic glycol comes from Saudi Arabia. If the current situation of the United States and Iran is in a negative direction, or has a certain impact on China’s imports from the Middle East, the price will directly respond to the short-term situation. Therefore, we should focus on the continuation of the international situation.
Limited market rebound due to cost drag and poor downstream demand
According to statistics, the current gross profit of coal to glycol market is about – 150 yuan / ton; that of methanol to glycol market is about – 900 yuan / ton; that of ethylene to glycol market is – 50 dollars / ton; that of naphtha to glycol market is – 35 dollars / ton. The cost is still in the state of loss, although slightly better than the previous period, the market mentality may be improved. But there is no substantial improvement in the market. As the Spring Festival approaches, many sets of devices in polyester plant have been planned to join the maintenance team in succession, and the polyester operation rate is also expected to decline, which may weaken the support to the market, but will be more obvious after January 10.
The market lacks significant positive support to guide the strong rise of prices, and the probability of short-term high volatility is relatively large.
On the whole, in the later stage, we will continue to pay attention to the impact of port arrival inventory and the situation of the United States and Iran on the export volume of the Middle East and other places.
| EDTA 2Na |