The raw material end collapsed! How long can strong ethylene glycol last?

With the news that OPEC + returned to the negotiating table at the end of March to discuss crude oil production cuts, the bottom of the main contract of ethylene glycol in 2009 was established at 3131 points, which opened a rebound. As of April 20, the main contract for ethylene glycol closed at 3712 CNY/ton, up 18% from the close on March 30. Although the inventory of ethylene glycol in the main port of the spot terminal has risen by 150,000 tons to more than 1.25 million tons from the end of March, and there is a risk of expansion, the recent trend of ethylene glycol is still strong. As the king of commodities, crude oil fell all the way after the OPEC + production reduction agreement was implemented. Due to the tight global crude oil storage capacity, the WIT crude oil May contract staged a "forced multi-style" decline in the last trading day. Negative oil prices. There is a clear split between the trend of cost-end crude oil and ethylene glycol. It is also the reason why the crude oil collapses and the trend of ethylene glycol is strong.

U.S. crude oil is not picked up by the delivery of pipelines, while the supply side of ethylene glycol is improved


With the spread of the New Coronary Pneumonia epidemic worldwide, the prevention and control measures overseas have tightened, and the demand for crude oil has shrunk dramatically. The International Energy Agency (IEA) said on April 15 that global oil demand is expected to drop by 9.3 million barrels / day year-on-year to a record low by 2020. Demand in April is expected to be 29 million barrels per day lower than in the same period last year, falling to 1995 levels. The agency said that although OPEC + will cut daily production by nearly 10 million barrels in the next two months, global oil inventories will still increase at a rate of 12 million barrels per day in the first half of this year. The shrinking demand is not so terrible. What really scares the market is that with accelerating accumulation, oil storage facilities around the world are filled up and the amount of offshore oil storage has also increased significantly. Morgan Stanley pointed out that offshore storage tanks will also be full within 60 days. The US Permian Basin has begun to use pipeline storage, and the remaining storage capacity in the world is approaching the limit. April 21st is the last trading day of the WTI crude oil May contract. WIT crude oil is delivered through pipelines. Due to the global storage capacity is approaching the limit and no one is receiving goods near the delivery market, WIT crude oil has appeared in the past month. Oil price.



Compared with crude oil, the fundamentals of ethylene glycol have a marginal improvement. The whole of March was the darkest moment for ethylene glycol, the cost-end crude oil plummeted, overseas demand suffered large-scale refunds, and ethylene glycol port stocks rose rapidly. The weak supply and demand combined with the tight liquefaction capacity of the port, ethylene glycol showed no resistance drop, the spot price of ethylene glycol once fell below 3000 CNY/ton, and the price of coal-based glycol reached 2650 CNY/ton. The excessively low price fell below the cash flow cost of most coal-to-ethylene glycol plants, the supply side of ethylene glycol improved, and coal-based installations were extensively overhauled.

As of April 16, the overall domestic ethylene glycol operating load was 58.83%, of which the coal-based ethylene glycol operating load was 36.20%, and the coal-based load dropped to a low level in recent years. In addition to the shrinkage of domestic coal plants on the supply side, the volume of ethylene glycol arriving in Hong Kong in the first half of April continued to shrink, and the accumulation rate of ethylene glycol ports slowed down. Although there is no obvious improvement in the ethylene glycol at the demand end, due to the shrinkage of coal at the supply end, the proportion of downstream purchases of oil has increased, and the port shipments have increased slightly. The stock of MEG ports in the main port area was about 1.253 million tons, a decrease of 0.4 million tons from the previous period, and ethylene glycol stocks were slightly degraded.

Compared with the high processing fee of PTA spot, the operating rate of the PTA device on the supply side has increased significantly. The accumulative acceleration of the accumulator. The margin of the ethylene glycol supply end improves. The fundamentals of the slowdown of the accumulator are significantly better than that of PTA. -TA spread quickly strengthened, driving ethylene glycol to oscillate upward.

The far-month contract is expected to be good, the spot of ethylene glycol still faces the risk of tight storage capacity


At present, the domestic main contract for chemical products has basically been shifted to the September contract, the EG2009 contract has become the main contract for ethylene glycol futures, and the far-month contract has become the market pricing benchmark. For far-month contracts, the market expects that the epidemic will be effectively controlled in the second half of the year, and the demand for crude oil is expected to be restored. With the obvious improvement in supply and demand patterns, oil prices are expected to be better. Large litres. As the fundamental margin of ethylene glycol turned better, the far-month contract also showed higher premiums. According to the price of ethylene glycol calculated by the Brent crude oil September contract, the market still has a certain profit, but with the price of ethylene glycol Continuous upward movement, the cash flow of coal plants with poor cash flow in the previous period was eased, the maintenance of several units of Red Sifang, Qianxi Coal Chemical Industry and Xinjiang Tianye (Phase I) was restarted, and the amount of ethylene glycol arriving in Hong Kong gradually increased at the end of April Before the end of the month, ethylene glycol is still expected to accumulate. Under high inventory, ethylene glycol still has the risk of tight storage capacity.

According to the situation of ethylene glycol surveyed by CCF at the end of March, all links of ethylene glycol social inventory are at an absolute high level except that the absolute value of terminal explicit inventory has not exceeded the historical high. The utilization rate of the tank capacity of the polyester plant in the survey sample is around 75%, which means that the stock of downstream ethylene glycol raw materials is at a relatively high level. The current terminal is weak, May Day is approaching, the weaving factory has a holiday expectation, the downstream of the polyester is weak, and accumulation is only a matter of time. Therefore, there is a certain overestimation of the previous sharp rise in the ethylene glycol far-month contract. The contract collapsed, the center of gravity of the crude oil far-month contract also showed a certain downward shift, and ethylene glycol also fell sharply.



Short-term or sustained range oscillation


At present, about half of ethylene glycol's production capacity is crude oil-naphtha, and crude oil still has a large impact on current ethylene glycol prices. Due to tight global crude oil storage capacity, OPEC + 's production cut agreement came into effect in May, crude oil supply is still high output, demand is weak, storage capacity is tight, crude oil may continue to bottom. The short-term ethylene glycol rebounded temporarily due to the improvement of the supply side and the strong fundamentals. In the follow-up, the volume of ethylene glycol arriving in Hong Kong this week is 210,000 tons, which is neutral and high, and there are still accumulation expectations. Port liquefaction has high inventories, crude oil at the cost end is still weak, and ethylene glycol may still oscillate weakly.