Ethylene glycol Weekly Market Report 2022

Table of contents

Table of contents

1. Summary of current market situation 2

1.1 Foreign market 2

1.2 Domestic market 2

2. Forecast of the next market trend 

3. Charts and detailed data 

3.1 crude oil 4

3.2 Closing price list of polyester raw materials 5

3.3 Cost Analysis 6

3.4 Port Inventory 7

3.5 Ethylene glycol maintenance device summary 8

3.6 Downstream polyester production and sales 10

4. Interpretation of hot news in this issue 

4.1 Sinopec and INEOS signed 120 10,000 tons/year Tianjin Nangang Ethylene Project Cooperation Agreement 11

4.2 Guangxi Hongyi 30 The 10,000-ton polypropylene project was handed over to 12

1. Summary of current market conditions

1.1 foreign market

                                                    Figure 1 Asian ethylene glycol market trend chart

MEG weekly average price	November 30 _ _	December 7 _ _	ups and downs	unit
CFR Asia	454	470	16	USD/ton

The price center of gravity of the Asian ethylene glycol market rose within a narrow range this week, with a weekly high of $ 475 /ton and a low of $ 465 /ton, with an average weekly price of US$ 470 /ton, an increase of US$ 16 /ton over the previous cycle .

December , a new 1 million tons/year monoethylene glycol plant was built in Lianyungang , and it is expected to take some time to operate smoothly. Ningxia, China Poly will build a new 200,000 -ton/year ethylene glycol plant in the first quarter of 2023 . It also has a new 200,000 tons/year

The production line, whose commissioning date has not yet been determined. Some industry players are optimistic. China currently imports about 600,000 tons of ethylene glycol per month. To meet the demand of domestic production shortage, after the new device is put into operation, the dependence on ethylene glycol imports will be weakened.

1.2 Domestic market

Ethylene glycol	December 1 _ _	December 8 _ _	amplitude	Change rate	unit
Huadong Region	3900	3925	25	0.64%	Yuan / ton
Weekly average price	3869	3907	38	0.98%	Yuan / ton

This week, the center of gravity of the domestic ethylene glycol market rose in a narrow range, and the atmosphere for negotiation was still sluggish .

It is 3845 yuan / ton, and the weekly average price is 3907 yuan / ton, an increase of 38 yuan / ton from last week. International crude oil fell continuously at the beginning of the week.

The alcohol market has been weakened by external factors, and the supply and demand side dominates the market. In terms of equipment, Shenghong Refining and Chemical has a set of 1 million tons/year.

The diol plant started operation on December 3rd , and the market pressure increased, and due to the recent arrival of less cargo, the inventory has dropped significantly .

As of Monday, the main port inventory in East China was 849,300 tons, a decrease of 37,700 tons from the previous month, and the destocking of ports boosted market confidence. At the beginning of the week , the epidemic control policies across the country were relaxed, and some areas have resumed normal production. However, the demand for textiles in the off-season continues to be weak, and it is difficult to see a significant improvement. There is a lack of terminal orders, and it is difficult to consume raw material stocks. The production and sales of polyester factories are not good, and the start-up continues to decline. As of Thursday, the overall start-up rate was around 72%, and the demand side lacked positive support. On the whole, the pressure on the supply side of ethylene glycol will not decrease. Although the domestic epidemic prevention policy has been relaxed, it is difficult for demand to get rid of the downturn in a short period of time. However, considering the current low valuation of ethylene glycol and limited downside space, it is expected that the market will remain low and volatile in the short term. In the later stage, we will continue to pay attention to port inventory and Changes in downstream demand..                                            Figure 2 domestic ethylene glycol market trend chart

2. Forecast of the next market trend

driving factors	next forecast	driving direction
upstream	Russia is still likely to take countermeasures or cut production directly due to sanctions, which constitute short-term support for oil prices. Crude oil futures prices may be moderately revised up in the next cycle due to rising supply risks. US crude oil WTI may return to around $ 75 /barrel, but Medium and long-term crude oil assets still face the pressure of demand destruction under the risk of economic recession, and oil prices are expected to After short-term consolidation, it returned to the downward trend.	good
supply side	The pressure on the supply of new devices is increasing. In the long run, the situation of domestic oversupply will be delayed. continued.	Bad news
demand side	Despite the relaxation of epidemic control policies across the country, textile off-season demand continues to be weak,	Bad news

	It is difficult to see a significant improvement, the lack of terminal orders, the raw material inventory is difficult to consume, polyester The production and sales of factories are not good, the start of work continues to decline, and the demand side lacks positive support.
comprehensive judgment	On the whole, the pressure on the supply side of ethylene glycol has not diminished. Although the domestic epidemic prevention policy has been relaxed, it is difficult for demand to get rid of the downturn in a short period of time. However, considering the current low valuation of ethylene glycol and limited downside space, it is expected that in the short term The domestic market will remain volatile at a low level, In the later period, we will continue to pay attention to changes in port inventory and downstream demand.	low shock

3、 Charts and detailed data

3.1 crude

crude	2022/12/1	2022/12/2	2022/12/5	2022/12/6	2022/12/7	unit
WTI	81.22	79.98	76.93	74.25	72.01	USD/barrel
Brent	86.88	85.57	82.68	79.35	77.17	USD/barrel

In terms of specific price data, the closing price of WTI crude oil futures on the New York Mercantile Exchange on December 7 , 2022 is 72.01 USD/barrel, down 7.97 USD/barrel or 9.96% compared to last Friday ; Brent crude oil futures on Intercontinental Exchange on December 7.

The closing price was US$ 77.17 /barrel, down US$ 8.40 /barrel or 9.82% from last Friday . During the three trading days from December 5th to December 7th , the average closing price of WTI was US $ 74.40 /barrel, a decrease of US $ 5.04 /barrel, or 6.35 % , from last week. It fell by US$ 5.09 /barrel, or 6.00 %. The three-day average price difference between Brent and WTI is 5.34 USD/barrel, narrowed by USD 0.05 /barrel from last week.

2nd local time , with Poland finally nodding, the West reached an agreement on the price limit of Russian oil. EU, G7.The G7 and Australia's decision to impose a price cap of $ 60 a barrel on Russian seaborne oil exports took effect on the 5th.

The production agreement, that is, from November to December 2023 , OPEC + will continue to maintain a production reduction scale of 2 million barrels per day . Based on the clues of the last cycle, OPEC+ has been psychologically prepared for the market to hold back, but failed to get further signals to stabilize the market, which still seriously frustrated the confidence of the bulls.

Risks in financial markets and fears of shrinking demand amid recession fears are key factors behind the collapse in oil prices this cycle. Due to strong U.S. economic data, the market’s confidence in the Fed’s slowdown in rate hikes has declined. If the Fed continues to raise interest rates aggressively to curb inflation, the risk of a global recession will intensify again. Goldman Sachs warned that the Fed ’s rate hike may continue until 2023

  In May , interest rate cuts will not be seen until 2024 , which will undoubtedly put great pressure on risk assets.

Supply risks resurfaced as Turkey blocked maritime traffic through the Turkish Strait, stranded at least 22 tankers . Concerned by the Turkish side, due to relevant regulations prohibiting tankers transporting Russian crude oil from obtaining European marine insurance, So these shipments may not be insured. At present, the West is negotiating urgently with Turkey. Although the oil tankers should not stay in the Turkish Strait for too long, it will still disturb the market in the short term, and oil prices may be partially supported.

Hiseachem crude oil research group believes that in the absence of favorable support in the market in this cycle, crude oil pricing tends to be guided by the bottom. There are currently two support points for the price bottom that the market can refer to. One is the U.S. Department of Energy’s repurchase of strategic oil reserves 67-72 US dollars / barrel, and the second is the 60 US dollars / barrel floor price set by the West for Russian oil. We believe that the support of crude oil around US$ 72 / barrel is still solid at present, and Russia may still take countermeasures or cut production directly due to sanctions, which constitutes short-term support for oil prices, and crude oil futures prices may rise moderately in the next cycle due to rising supply risks Revised, U.S. crude oil WTI may return to around $ 75 /barrel, but medium and long-term crude oil assets still face the pressure of demand destruction under the risk of economic recession, oil prices are expected to fall

After a short-term consolidation, it returned to the downtrend. According to foreign media sources, China will fully open its borders on January 9 , 2023 , but the market has already priced in the benefits of China's opening up in advance, and it is no longer able to provide the necessary support for the international oil market in the short term .

3.2 Closing Price List of Polyester Raw Materials

product	Average price last week	average price this week	Quote change	unit	Remark
crude	78.98	76.878	-2.66%	USD/barrel	WTI
crude	85.08	82.33	-3.23%	USD/barrel	Brent
naphtha	684.60	657.45	-3.97%	USD/ton	CFR Japan
MX USA	1310.24	1228.16	-6.26%	USD/ton	FOB US
MX Asia	873.90	827	-5.37%	USD/ton	CFR Taiwan LC 30 days
PX America	1142.52	1065.384	-6.75%	USD/ton	FOB US
PX Asia	938.20	905.4	-3.50%	USD/ton	CFR Taiwan/China
PTA	744.40	725.8	-2.50%	USD/ton	CFR China LC 90 days
MEG	448.40	470.4	4.91%	USD/ton	CFR China LC 90 days
PET	922.00	888	-3.69%	USD/ton	FOB Northeast Asia

                              Figure 4 Price Chart of Ethylene Glycol and PTA

3.3cost analysis

Figure 5 Cost-benefit analysis chart of petroleum grade ethylene glycol

This week, the cash flow of naphtha-based ethylene glycol continued to lose money. As of Thursday, the integrated ethylene glycol instant cash was US$ 184.23 / ton, and the average weekly cash flow was US$212.13, which was a significant increase from last week. Non-integrated Cash flow has also picked up. As of Thursday, the immediate cash flow in the external market was around - 168.45 US dollars / ton, and the weekly average cash flow was - 163.21 yuan / ton.

3.4 Port inventory Unit: 10,000 tons

Reservoir area	November 28 _ _	December 5 _ _	ups and downs	amplitude
Ningbo Port	5.5	5.2	-0.30	-5.45%
Zhangjiagang	45.43	44.13	-1.30	-2.86%
Taicang	18.8	17.1	-1.70	-9.04%
Jiangyin and Changzhou	11.3	10.2	-1.10	-9.73%
Shanghai and Changshu	7.67	8.3	0.63	8.21%
East China total inventory	88.7	84.93	-3.77	-4.25%

MEG port in the main port area of East China is about 849,300 tons, a decrease of 37,700 tons from the previous period . Among them, Ningbo 5.2

3,000 tons from the previous period , and an average daily delivery of 2,000 tons from a mainstream warehouse; 83,000 tons from Shanghai and Changshu , an increase from the previous period

An increase of 6,300 tons; around 441,300 tons in Zhangjiagang, a decrease of 13,000 tons compared with the previous period , and the average daily delivery of a mainstream warehouse

5,200 tons; 171,000 tons in Taicang, a decrease of 17,000 tons from the previous period , and an average daily delivery of around 4,700 tons from a mainstream warehouse;

Yin and Changzhou 102,000 tons, a decrease of 11,000 tons from the previous period .

Figure 6 Ethylene Glycol East China Port Stock Price Comparison Chart

3.5 Glycol Overhaul Unit Summary

Manufacturer's name	MEG production capacity (10,000 tons/year)	Device operation
Yangtze-BASF	34	normal operation
Yangzi Petrochemical	30	normal operation
Shanghai Petrochemical 1#	twenty three	6.18 Parking
Shanghai Petrochemical 2#	38	restart operation
Zhenhai Refining & Chemical	65	Switch to EO
Zhenhai Refinery 2#	80	running
Sanjiang Chemical	38	near April 13th , restart time to be determined
Tianjin Petrochemical	10	parking
Zhongsha Tianjin	42	parking
Yanshan Petrochemical	8	Parking, restart pending
Maoming Petrochemical	12	10.25 Shutdown for maintenance, 12.1 Restart
Wuhan Ethylene	28	12.1 Nearby parking, plan to last 1-2 months
Fujian United	40	Restart operation, about 50%
Fushun Petrochemical	4	normal operation
Jilin Petrochemical	16	normal operation
Liaoyang Petrochemical	20	EO -based
Dushanzi Petrochemical	5	Shutdown for maintenance, restart time to be determined

Sichuan Petrochemical	36	normal operation
Liaoning North Chemical	20	normal operation
Far East United	50	normal operation
CSPC	80	Phase II full load operation
Ningbo Fund Energy	50	parking
Hengli Petrochemical	90	Switch to PE
Zhejiang Petrochemical	75	normal operation
Zhongke Refining & Chemical	40	10.26 down to 60 %
Sinochem Quanzhou	50	restart operation
Tongliao Gold Coal	30	12.1 Shutdown for maintenance, restart to be determined
Henan Yongjin Puyang Coal Chemical Industry Co., Ltd.	20	normal operation
Henan Yongjin Anyang Coal Chemical Industry Co., Ltd.	20	parking
Henan Yongjin Xinxiang Coal Chemical Industry	20	parking
Henan Yongjin Yongcheng Coal Chemical Industry Co., Ltd.	20	normal operation
Henan Yongjin Luoyang Coal Chemical Industry Co., Ltd.	20	parking
Xinjiang Tianye Co., Ltd.	35	50,000 tons running
Hualu Hengsheng	55	500,000 tons load reduction operation
Sinopec Hubei Fertilizer Branch	20	parking
Xinhang Energy Co., Ltd.	36	running
Yangmei Group Shenzhou Fertilizer	twenty two	parking
Yangmei Group Shouyang Chemical Industry	20	restart operation
Yangmei Group Pingding Chemical	20	parking
Shandong Lihua Yiweiyuan Chemical Co., Ltd.	20	parking
Guizhou Qianxi Coal Chemical Industry	30	running
Inner Mongolia Yigao Coal Chemical Industry Co., Ltd.	12	8.10 Fault shutdown, restart to be determined
Inner Mongolia Rongxin Chemical	40	restart operation
Anhui Red Square	30	11.1 Nearby parking for maintenance
Xinjiang Tianying	15	restart operation
Shanxi Weoneng	30	10.23 Shutdown, restart to be determined
Henan Yongcheng	20	normal operation
Xinjiang Tianye Phase III	60	Reduced load operation
extended oil	10	9.1 Stop, restart time to be determined
Binhua of Weihe River	30	parking
Satellite petrochemical	180	Resumption of work to 60 %
Jianyuan Coal Coking	30	normal operation
Zhejiang Petrochemical Phase II	80	normal operation
Anhui Haoyuan	30	11.21 Shutdown inspection
Sanning, Hubei	60	normal operation

Gulei Refining	70	Restart around 10.10
Xinjiang Guanghui	40	restart time to be determined
Shenhua Yulin	40	normal operation
Guangxi Huayi	20	There is an overhaul plan in late September

The overall domestic ethylene glycol start-up load is about 48.81% ( domestic MEG production capacity is 23.122 million tons/year ). Among them, the start-up load of coal-to -ethylene glycol is about 40.17% ( the total production capacity of coal-to-ethylene glycol is 10.27 million tons/year ).

3.6 Downstream polyester production and sales

picture 7 Downstream Polyester Profit Chart

During the period (20221202-1208) of this cycle, the polyester market as a whole went up and down, with mixed market price trends and market transactions. messy. From the upstream point of view , during this period, the market weighs the expectation of OPEC + production reduction strategy and the drag on demand from the global local epidemic. Although OPEC + insists on promoting production cuts and U.S. commercial crude oil inventories continue to decline, the market is worried that the Fed may still aggressively raise interest rates. Refined oil inventories Substantial growth, superimposed on the market's unabated worries about the global economic recession, European and American crude oil fell sharply during this period, and the aggregation cost side is relatively negative. From the perspective of direct raw materials, as of December 8 , the market price of PTA dropped to 5,095 yuan/ton .

It is necessary to adjust the price of raw material ethylene glycol to 3930 yuan / ton, and the theoretical cost of polyester has dropped to around 5709 yuan / ton, which is 10% compared with last Thursday.

The cost fell by 352 yuan/ton, and the polymerization cost fell sharply during the (20221202-1208) period, which did not support the polyester market well. During this cycle (20221202-1208), the start of polyester production dropped to around 72.83 %, and the start of operation fell by 2.01% from the previous month . exist

(20221202-1208) , the quotations of polyester staple factories dropped to 7050-7200 yuan / ton. As of December 8 , polyester staple 1.4D large chemical fiber polyester staple in East China is around 6750-6800 yuan/ton, and the overall market price is lower than last Thursday.

It fell by 125 yuan/ton; during the period, the start-up of polyester staple fiber was slightly adjusted to 77.43%, the overall spot supply was relatively sufficient, the terminal demand was still dominated by multi-stage replenishment, and the overall production and sales were still average. During the period of 20221202-1208 , mainstream polyester filament manufacturers are reluctant to sell, Most of the quotations rose slightly, some remained stable, and the center of gravity of the overall market transaction moved up slightly. Affected by the buying sentiment, the sentiment of polyester heavy volume on Monday was more obvious to around 200%. As the cost side moves down, The overall market sentiment will drop, and terminal purchases will return to light. As of December 8 , the overall inventory of the polyester market is still concentrated at 31-41 In terms of specific products, POY factory inventory was 33.4 days, a month-on-month -3.75%; FDY factory inventory was 33.7 Days, -3.16% month-on-month; DTY inventory is at 40.8 days, -4% month-on-month. On Tuesday, the production and sales of polyester filament factories increased, and the inventory of polyester filaments was slightly reduced. In this cycle, the inventory of polyester staple fiber reached about 6.21 days, an increase of about 1.57 days compared with last week .

As of December 8 , the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang was 48.90 % , a decrease of 1.33% from last week . Recently, Logistics and transportation in many places are gradually recovering, and e-commerce platforms are actively shipping winter clothes. The demand for children's clothing in Huzhou has picked up slightly at the end of the year. The sales of cold-proof and warm-keeping fabrics have improved slightly. Increase, However, the overall volume of new monomers in the market is limited, and some areas have recovered slightly, making it difficult to improve the subsequent sluggish trend of demand. At present, most weaving manufacturers are not very enthusiastic about production considering the meager profits, so the operating rate of manufacturers has declined to varying degrees. It is reported that, Most manufacturers are considering parking at the end of the month or at the beginning of next month for holidays. If there is limited follow-up of new orders, weaving manufacturers may consider parking for holidays after Christmas . On the whole, there is no support for the current polymerization cost end, the supply and demand of polyester itself is limited, and the performance of the terminal off-season is weak. It is expected that the polyester market will run in a narrow range next week. It is necessary to pay attention to the changes in the upstream cost end and the supply and demand of polyester.

4. Interpretation of hot news in this issue

4.1 Sinopec and INEOS signed 120 10,000 tons/year Tianjin Nangang Ethylene Project Cooperation Agreement

Recently, Sinopec and INEOS Group signed a cooperation agreement to introduce INEOS to participate in the 120 10,000 tons/year Tianjin Nangang ethylene and downstream chemical products project, share ratio 50%: 50%. This agreement is an important part of the integrated cooperation that the two parties intend to carry out in Tianjin , and will help the development of China's high-end chemical industry.

Sinopec Chairman Ma Yongsheng and Ineos Chairman Sir Jim Ratcliffe Ratcliffe signed the project cooperation agreement online.

Ma Yongsheng said that Sinopec and INEOS have cooperated for many years, and the signing of this agreement will bring the cooperative relationship between the two parties to a new height. It is believed that under the requirements of the era of "double carbon" goals and the transformation of energy and chemical industry, Sinopec and INEOS can give full play to their strong local advantages, resource advantages and technological advantages, and continuously promote the complementary advantages of both parties to achieve a win-win development.

 INEOS Founder and Chairman Jim Ratcliffe said that the cooperation project with Sinopec in Tianjin has expanded INEOS' petrochemical business footprint in China. We announced a package of cooperation with Sinopec earlier this year, with an investment of US$ 7 billion. The Tianjin project is a new continuation and a typical example of our continuous str engthening of cooperation with Sinopec in various fields.INEOS is a global manufacturer of petrochemicals, specialty chemicals and petroleum products with 36 locations in 29 countries around the world

Business segments and 194 production bases, in recent years, with the launch of the INEOS Automotive and INEOS Healthcare brands, the acquisition of the iconic British brand Belstaff, and the growing sports business, INEOS' business scope has become more diversified .

4.2 Guangxi Hongyi 30 The 10,000-ton polypropylene project was handed over

On December 3 , Guangxi Hongyi New Material Co., Ltd. ("Guangxi Hongyi" for short ) 300,000 tons/year polypropylene project handover ceremony was successfully held. So far, the project's main device, supporting public works and auxiliary facilities have been fully completed.

The main body of the project, Guangxi Hongyi, is a joint venture between Hongji Petrochemical and Guangxi Huayi. It is a supporting project of Guangxi Huayi Qinzhou Chemical New Materials Integration Base. The total investment of the project is about 600 million yuan . tons/

One set of annual polypropylene device is planned to be put into operation by the end of December , and the annual output value will be about 2.5 billion after it is put into operation. The project adopts domestic independent innovation and improved polypropylene SPG technology (combined process of polypropylene liquid-phase bulk polymerization and horizontal tank gas-phase polymerization ), and mainly develops several grades of polypropylene PP powder products, which are widely used in weaving, In the fields of food packaging and non-woven PPR pipes, the market covers the whole country and relies on the port advantages of the Qinzhou Port area to radiate South China, Central China and Southeast Asian countries and regions.