Ethylene glycol's strong performance may be difficult to reproduce

After the Spring Festival holiday, the ethylene glycol futures price trend was like a "roller coaster": from the end of February to the beginning of March, ethylene glycol continued to rise sharply, driven by rising oil prices and the optimism of the entire energy and chemical sector, reaching a peak of nearly 6,300 CNY/ton , Setting a new high since the listing of futures; in the past week, the ethylene glycol market has "changed abruptly". Although oil prices rebounded after two consecutive days of decline, the ethylene glycol futures prices still fell sharply. Regarding the market outlook, we believe that although international oil prices will still boost ethylene glycol in the short term, under the circumstances of "strong reality and weak expectations" and the influence of "weak expectations" gradually increasing, ethylene glycol may not be able to reproduce the previous period. Strong performance.

　　Domestic installations start to improve

　　 With the sharp rise of ethylene glycol futures prices after the Spring Festival, the gap in ethylene glycol processing has significantly expanded, and the production willingness of enterprises has been repaired. As a result, the start of domestic ethylene glycol plants has increased significantly. As of March 12, the domestic ethylene glycol plant's comprehensive daily operating rate was 67.83%, an increase of 6.89 percentage points from February 10 before the Spring Festival, and a decrease of 1.35 percentage points from the same period in 2020; based on the current effective production capacity, 3 On 12th, the domestic ethylene glycol daily output was approximately 29,200 tons, an increase of approximately 4,900 tons over the same period in 2020.

　　 In addition to the start-up of existing production capacity, the commissioning of new equipment has also become the "Sword of Damocles" hanging on the head of ethylene glycol. According to the current plan, Hubei Sanning, Satellite Petrochemical and Zhejiang Petrochemical Phase II ethylene glycol plants will be put into operation in the near future, of which Satellite Petrochemical and Zhejiang Petrochemical Phase II are large-scale installations with an annual production capacity of more than 1.5 million tons. If these three units are put into production as scheduled, the effective annual domestic ethylene glycol production capacity will increase by 3.78 million tons, accounting for 64.73% of the planned annual new production capacity. Although based on the past situation, it will take some time for the new device to start from trial run to the stable release of production, but more than 60% of the new production capacity of the year is about to be put into production, which still puts greater pressure on ethylene glycol.

　　 Market trading returns to flat

Under the influence of the “Chinese New Year in situ” initiative by the provincial and municipal governments, after the end of the Spring Festival holiday in 2021, the resumption process of polyester enterprises is significantly faster than in previous years; under the influence of factors such as the improvement of the terminal market and the expected recovery of foreign trade orders, the polyester plant The start of construction has risen to the highest level in recent years. As of March 12, the domestic polyester comprehensive daily operating rate was 91.09%, an increase of 12.91 percentage points from before the Spring Festival, and an increase of 20.45 percentage points from the same period in 2020. According to the existing polyester production capacity, the domestic polyester daily output is about It was 159,100 tons, an increase of about 43,900 tons over the same period in 2020.

　　As most companies complete the phased replenishment within the first two weeks after the Spring Festival, their acceptance of high-priced raw materials has dropped significantly, and the polyester market has therefore been flat. In the week of March 11, the weekly production and sales rates of domestic polyester chips, polyester staple fibers and filaments were 56.94%, 28.78%, and 63.21%, respectively, representing a decrease of 3.06, 84.22, and 1.75 percentage points from the same period in 2020.

　　Port inventory remains low

At the end of February and early March, the ethylene glycol of East China Port planned to reach the level of about 200,000 tons for two consecutive weeks, but then it fell to a low level of about 150,000 tons; at the same time, the shipment of ethylene glycol from East China Port The situation is good. For most of the time after the holiday, the combined daily shipments of Zhangjiagang and Taicang both exceeded 10,000 tons. The low incoming cargo and the good outgoing situation kept the ethylene glycol inventory of East China Port at a low level. According to the latest statistics, the stock of ethylene glycol in East China ports has increased. However, considering that overseas installations have been overhauled and the installations that were forced to shut down in the United States due to extreme cold weather have not yet recovered, short-term imports of ethylene glycol are unlikely to increase significantly. Therefore, it is expected that the port Ethylene glycol stocks will continue to remain low. As of March 11, the total ethylene glycol inventory of East China ports was 643,100 tons, a decrease of 263,300 tons from the same period in 2020.

In the short term, with the polyester plant operating at a high level and terminal looms operating at a high level, the contradiction between supply and demand of ethylene glycol is not prominent. East China port inventory remains low and international oil prices continue to operate at a high level for more than a year. Glycol must be supported, but the relatively strong “reality” corresponds to the “weak expectation” that a large number of new devices are about to be put into production. After the ethylene glycol import rebounds, the supply pressure will increase significantly, and as time goes by, “weak expectations” The impact of "expectation" on the future price of ethylene glycol gradually increases.

On the whole, we believe that under the influence of "strong reality and weak expectations", despite the boost in international oil prices, ethylene glycol may not be able to reproduce the strong performance of the previous period in the short term. It is expected that it will mainly operate in oscillation. The "weak expectations" effect is gradually increasing, and the trend of ethylene glycol is expected to weaken in the later period.