Ethylene: crude oil fell, and the market fell

Since late February, under the background of escalating conflict between Russia and Ukraine, international crude oil has repeatedly reached new highs. Especially in the afternoon of February 24, the intraday rise of crude oil futures prices in Europe and the United States exceeded 6%, and Brent spot contract was reported at US $103.09/barrel, up 6.45%, continuing the high price point since September 2014. Correspondingly, the stock market fell sharply, the external situation changed, and crude oil and the stock market fluctuated sharply. Recently, the geopolitical risks continued to ease and the international crude oil fell sharply. As of March 15, the international oil price fell to US $96.44/barrel in April and US $99.91/barrel in Brent in May. Under the background of weakening the cost side, the upward trend of ethylene was restricted and stopped rising to fall.

Under the influence of the cost side, the price of ethylene has increased. With the gradual easing of the situation in Russia and Ukraine, the market panic subsided, the high level of crude oil fell, and the price of ethylene also fell.

At present, the external situation has eased, crude oil has fallen, and the cost side is clear. Recently, the spread of the domestic epidemic has become a new focus. There are obvious epidemic prevention and control measures in East and South China. Traffic control is implemented in some areas, logistics and transportation are gradually tightened, transportation is more difficult, the willingness of downstream receiving goods is not strong, and the overall performance of the industrial chain is not good.

Overall, driven by the surge in crude oil in the early stage, ethylene is supported on the cost side. However, the market demand performance is flat. In addition, in order to alleviate the pressure from the cost side, the domestic device load and production are reduced, the market supply is tightened, and the manufacturer's quotation is firm. Then, with the decline of crude oil price and the weak demand in the downstream for a long time, the price of ethylene fell. The uncertainty of the epidemic in the later stage will dominate and affect the industrial market in the short term. In the case of long and short interweaving in the upstream and downstream markets, it is expected that the follow-up weak and stable finishing of ethylene will be the main.