Ethylene glycol gains are expected to continue

Driven by negative profits, the output of coal-to-ethylene glycol declined, and the operating load remained low. In addition, the listing of staple fiber futures has pushed up the polyester textile series and the ethylene glycol port inventory is well digested, so it can try to participate in the ethylene glycol 2101 contract in the fourth quarter, and there are more orders on bargaining.

　　 The cost end support is relatively strong

　　 Despite the second epidemic, the vaccine development continues to send good news. There are good expectations for the unblocking of countries and the restoration of flights. The price of crude oil has been oscillating recently, and there is support on the cost side of oil-based glycol. In addition, my country has restricted the import of coal from Australia, and the price of coal has recently risen. There is also support on the cost side of coal-to-ethylene glycol.

　　 Only Rongxin Chemical's 400,000 tons/year coal-to-ethylene glycol production capacity will be put into operation in 2019, which is far below the 3.27 million tons/year plan. It is estimated that 4 million tons/year of coal-to-glycol production capacity will be put into operation in 2020. However, as of now, due to the deep fall in crude oil prices, the profits of coal-to-glycol have shrunk because of the downstream profits and the increase in coal prices. In the context of the decline in coal competitiveness, only 800,000 tons of new production capacity per year.

　　The industry operating rate continues to decline

In the first half of 2020, the price of crude oil has dropped deeply, the overseas epidemic situation has become more serious, and the chemical products have fallen off the cliff. Under the condition of little change in the coal market, the profit of coal chemical industry has been greatly compressed, and coal-to-ethylene glycol has been at a loss for a long time. Equipment maintenance and even parking are common.

The data shows that the total domestic ethylene glycol production capacity is 14.535 million tons/year, of which the total production capacity of coal-to-ethylene glycol (including methanol production) is 5.19 million tons/year (newly added 500,000 tons/year in Sinochem Quanzhou, Shanxi Wo 300,000 tons of energy per year), accounting for one-third of the supply side of the world, while the rest are mostly made of ethylene. As of October 2020, the gross profit of coal-to-ethylene glycol is -1516 CNY/ton, the gross profit of methanol-to-ethylene glycol is -1460.5 CNY/ton, and the gross profit of ethylene-to-ethylene glycol is -200.75 US dollars/ton. The diol gross profit is USD 23.51/ton. Most manufacturers have been in a state of severe losses for a long time, which will inevitably lead to a contraction of supply.

　　 On October 9, the starting load of the ethylene glycol industry was 59.73%, of which the starting load of coal-to-ethylene glycol was 50.69%, a decrease of 1 percentage point from the previous week. Tianjin Petrochemical’s 100,000-ton plant was shut down in early October, and the restart time is yet to be determined. In the second half of October, there is still a plan for device maintenance. Among the overseas installations, two US installations were shut down due to the hurricane, and the restart plan was also delayed.

　　 Port inventory digestion is obvious

　　 Affected by the epidemic, clothing exports have been hit, the start load of the polyester industry has dropped, market sentiment has also been pessimistic, and prices have fallen into depressions. However, the prices of chemicals such as plastics are relatively strong due to the epidemic and the advantages of industrial concentration. Therefore, bottle flakes, which are usually used as substitutes, are favored due to their price advantages. There is a saying that "bottle flakes replace everything". At the same time, the performance after the listing of staple fiber futures also proved that the polyester market is recovering, and the demand for ethylene glycol is not as weak as imagined. At present, mainstream textile countries represented by India and Southeast Asia are unable to effectively start work, and my country's epidemic prevention and control is good, and overseas orders have begun to flow to the country.

　　 In August, ethylene glycol stocks hit a record high, but the price is running above the support level, indicating that the margin of pressure for high stocks has weakened. At this time, the impact of inventory decline on prices is more positively sensitive. Data show that ethylene glycol port stocks have been reduced from 1.4 million tons in August to 1.28 million tons in October, a range close to 10%. The speed of ethylene glycol port destocking exceeded expectations.

In conclusion

In general, the entire ethylene glycol industry is in a dilemma of losses, and the supply is significantly shrinking; global textile orders flow to the country, and demand exceeds expectations; the port has entered the process of destocking, and the ethylene glycol market has fallen by nearly 10% since August. Long time. Specifically, choose the 2101 contract, do more on dips, and operate on a rolling basis. The trading time is set from October to November, and the opening interval is set at 3900-4000 CNY/ton; the target point is set at 4600 CNY/ton; the stop loss point is set At 3800 CNY/ton.