Will The Short-Term Market Rebound After The Collapse Of Ethylene Glycol?

After the crash last week, the ethylene glycol market in recent years showed a strong stalemate trend. Some East China large single spot negotiated to near 4290 yuan / ton, the price was at a relatively low level, the market short kinetic energy weakened, but the downstream polyester production and marketing continued to slump, resulting in weak demand for market demand.

So in the case of ethylene glycol crash, short-term market is expected to rebound?

Cost stability and profit loss

The upstream of the industrial chain was affected by the decline in EIA stocks and the impact of the US hurricane. On the PX side, the price of China PX CFR began to weaken last Friday, and was affected by the new products put into operation at the end of this month. The PX supply and demand decreased slightly pessimistic, and the market transaction became more cautious. Therefore, the PX price in the short term is expected to be stable.

In terms of profits, as the domestic ethylene glycol market is constrained by the gold face, the profitability of various processes has declined in an all-round way, and the losses have continued to expand. Among them, the cash flow from coal to ethylene glycol is -1135 yuan / ton; the cash flow of methanol to ethylene glycol is -1720 yuan / ton; the ethylene production of ethylene glycol is -130 US dollars / ton; the cash flow of naphtha to ethylene glycol is -50.49 US dollars / ton.

Port inventory high, start up

From the import data in the first half of the year, imports in January, February, March and April were 1 million 10 thousand tons, 701 thousand tons, 897 thousand and 400 tons, 937 thousand tons, and port stocks at 1 million tons. Vertical comparison, the current market port inventory digestion and decline, as of now, East China ethylene glycol port inventory is about 1 million 31 thousand and 800 tons, although the chain has dropped, but still in the peak of history. In terms of operating rate, the ethylene ethylene glycol unit operation rate is about 72%, the coal glycol glycol utilization rate is about 58%, and the plant start-up has picked up.

Downstream started to decline, production and marketing dull

Last week, the average operation of polyester industry was 89.30%, down 1.67%, resulting in a decline in the operating rate of the industry. The reason is that the overall demand for the downstream industry has not improved significantly. Polyester production and marketing remain in the doldrums. The stock of products has rebounded again, and polyester prices have dropped sharply. In early July, Shaoxing Tiansheng 550 thousand tons, new Feng Ming, Tongxiang 500 thousand tons and other devices began to reduce production and maintenance, and polyester load continued to decline this week.

To sum up, the main port shipment is good in recent years, and the stock is declining continuously. However, the production and marketing of polyester terminal is not good enough, and the market is pessimistic about the downstream. Short term ethylene glycol market is expected to maintain a weak arrangement. (source: Huizhou merchants, long Zhong information)