The bottom support of ethylene glycol price for port’s small stock removal was strengthened
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According to the data from the business community, the average price of domestic oil to glycol was 4012.50 yuan/ton on November 14, up 0.31% from the previous trading day. In terms of futures, the main contract eg2301 on the 14th closed at 3975 yuan/ton, up 2.63% daily. The spot negotiated price of ethylene glycol in the port cargo market is around 3980 yuan/ton within the day, and the negotiated price in December is around 4025 yuan/ton. There is a slight premium for forward spot. In the short term, the market bottoming expectation is strengthened.
According to the 730 k line of the business community, the daily ethylene glycol price has recently risen slightly after approaching the 7-day average, and the ethylene glycol price has stopped falling and stabilized, gradually entering the short trend upward channel.
The recent market trend is good, mainly based on the following factors:
1. The port went to the warehouse slightly. According to the tracking data of the business community, on November 14, 2022, the total spot stock of ethylene glycol in the main port of East China was 823700 tons, which was 850000 tons compared with the total spot stock of ethylene glycol on the 10th day, 26300 tons went to the warehouse, 884300 tons compared with the stock on the 13th day of last month, a month on month decrease of 6.8%. The overseas import volume was reduced, and the port inventory was eased due to the reduction of overseas arrivals.
2. The price of ethylene glycol fell to a low level, the pressure of loss on industrial devices was great, and the expectation of production reduction was strengthened. It is reported that a 360000 t/a MEG unit in the United States is planned to stop in mid November, and the restart time is to be evaluated; At the beginning of November, a set of 300000 t/a MEG unit made of synthetic gas in Anhui Province was reduced to about 40% for operation due to the impact of previous maintenance, and the recovery time is to be determined; Another 300000 t/a MEG unit in Anhui has been shut down as planned around the beginning of November, and its restart is pending; The load of the 3 # 800,000 ton production line of a 2.35 million ton ethylene glycol plant in Zhejiang has been reduced to 80% to 90% due to some reasons. At present, 1 # and 2 # are operating at full load; Affected by the poor efficiency of ethylene glycol, at the beginning of November, overseas suppliers reduced production moderately for their units located in the United States. In addition, it is reported that the supplier’s 530000 t/a ethylene glycol unit in Kuwait has been restarted before, and it is expected that the load will be compressed in the later stage.
The supply and demand fundamentals are hard to change. The medium term is weak
The downstream production of the industrial chain has gradually entered the end stage at the end of the year. The downstream polyester and terminal weaving, printing and dyeing loads are expected to decline, and the supply and demand are hard to improve.
On the demand side, all varieties of the downstream polyester industry chain have reduced their negative output. Among them, the polyester side has the largest reduction in output. PX/PTA is currently in a vacuum period of production, and the processing fees of PX/PTA in the early stage have been severely compressed. The operating rate of PX in China is 72.56%, down 0.96% from last week, down 6.78% from early November, and down for three consecutive weeks. Affected by the shrinking supply of PX, PTA has subsequently started to reduce its negative output. The operating rate of PTA this week is 73.3%, down 0.85% from last week, and down 2.88% from the beginning of the month, For two consecutive weeks, the output was reduced. The polyester end began to reduce its overall load this week, with the comprehensive operating rate dropping from 81.06% to 78.23%, of which the filament was the most obvious, falling to 64.12%.
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On the supply side, the commissioning of new units was accelerated, and ethylene glycol maintained the pattern of high commissioning and low start-up. A 1.8 million ton unit in Yulin, Shaanxi, of which two 600000 ton units have been successfully started, and the remaining 600000 ton units are expected to start this month. A set of 300000 t/a MEG unit made from syngas in Inner Mongolia has been restarted at the end of October. It is expected that the product will be delivered within weeks, and it is planned to operate at 40% load in the later period. It is reported that the unit was shut down for maintenance in early October due to failure.
The domestic operating rate data showed that the overall operating rate of ethylene glycol in October was 54.74%, up month on month. At present, the operating rate of ethylene glycol by ethylene method is more than 60%, and that of other processes is around 25%. As of October 10, the comprehensive operating rate was 50.38%, higher than that in July/August/September.
At present, the number of days for ethylene glycol polyester factory to stock up is 15.1 days, up 0.9 days from last week. There is a certain hidden inventory, and the pattern of strong supply and weak demand still exists.
Strengthening of cost support
At present, the ethylene glycol of each process still has losses. Although it has improved slightly in the near future, we still need to wait and see the support of the cost side in the short term. It is expected that the ethylene glycol will operate with strong shocks in the short term, but there is limited room for the long-term upward trend.
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