Overview of ethylene glycol market

 

PVA 0599 (PVA BF05)

Ethylene glycol prices fell in March. According to data from Business News Agency, on March 27, the average price of domestic oil based ethylene glycol was 4130 yuan/ton, a decrease of 4.14% compared to the average market price of 4308.33 yuan/ton at the beginning of the month.

 

On March 27th, the spot price of ethylene glycol in the East China market slightly decreased, with the external execution price range of 3950-4350 yuan/ton for mainstream manufacturers in East China; The spot price of ethylene glycol in the South China market is 4150 yuan/ton, while the spot price range for mainstream manufacturers in Central China is 4030 yuan/ton; The spot price of ethylene glycol in the North China market is basically stable, and the spot price of mainstream manufacturers in North China is 4200 yuan/ton.

 

Macroscopic factor disturbance

 

The Federal Reserve announced a 25 basis point hike in interest rates, raising the target range of the federal funds rate to 4.75% – 5%, while suggesting that future interest rate hikes may weaken. The overall chemical industry sector fell significantly in the early stage due to crude oil price factors.

 

With new production, the overall supply is loose

 

From the supply side, recently, new ethylene glycol units have been put into production, and some early maintenance units have been restarted. The pressure at the ethylene glycol supply side has rebounded in the short term.

 

May is a good month for transferring production

 

List of imports and exports

 

In terms of imports, the import volume of ethylene glycol in February was 625400 tons, a year-on-year increase of 39.39% and a year-on-year decrease of 13.02%; The export volume of ethylene glycol in February was 2900 tons, a year-on-year decrease of 83.88% and a year-on-year increase of 1269.16%. Import arrivals in March may decline, and port inventory may show a small decrease in inventory.

 

News of downstream demand is negative

 

POLYVINYL ALCOHOL

There are rumors in the market that polyester enterprises are reducing production. Currently, the profit performance of various types of polyester is still sluggish, and the comprehensive profit of polyester has been slightly repaired on a month-on-month basis. However, polyester inventory continues to accumulate slightly, and the absolute inventory volume remains high on a year-on-year basis. According to data, on March 23, the polyester operating rate was 86.98%, and the polyester filament production and sales were 25.65%.

 

Ethylene glycol inventory goes to warehouse but remains at a high level

 

As of March 27, the inventory of ethylene glycol in East China main port was 1.0269 million tons, compared to 1.0698 million tons of ethylene glycol in East China main port on March 2, and 42900 tons of ethylene glycol were removed from the warehouse. On March 10, 2022, the inventory of ethylene glycol in East China main port was 950700 tons. Inventory is currently relatively high.

 

Downstream space narrows in the future

 

Currently, the average spot price of ethylene glycol is within a relatively low range in history. The recent trend of crude oil has been volatile and weak, with coal prices converging strongly and short-term cost side support weakening. In addition, the supply pressure of ethylene glycol remains in the short term, and in terms of demand, the start of terminal looms has weakened slightly, and some polyester factories have production reduction plans, suppressing the upward trend in ethylene glycol prices; However, ethylene glycol is at a negative profit level, with cost side impact factors expanding and downward space narrowing. In the medium term, as the scale of device maintenance increases, there is expected to be a contraction in supply, while the expectation of weak supply and good demand in the long term remains unchanged. It is expected that in the short term, the probability of sideways shocks in the future market of ethylene glycol will increase, and the average price operating band will be around 3950-4200 yuan/ton.

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