Ethylene glycol: weak demand, dilemma between rise and fall

Since Russia took military action against Ukraine at the end of February, the conflict between Russia and Ukraine has been escalating. The intensive sanctions against Russia by western countries have aroused concerns about the interruption of crude oil supply. At the beginning of the month, crude oil futures soared continuously and the price reached new highs. However, under the condition of serious losses and low valuation, the market price of ethylene glycol is easy to fluctuate with the cost side. With the opening of negotiations between Russia and Ukraine, the uncertainty increased and the crude oil price plummeted, Ethylene glycol market was also dragged down.

At the beginning of the month, under the continuous sharp rise of crude oil, the market sentiment warmed up and ethylene glycol opened a rapid rise channel. Then, Russia and Ukraine opened negotiations. The UAE changed its position and urged OPEC + to overproduce. On March 9, the international crude oil plunged by 13%. The next day, the opening of ethylene glycol futures fell sharply, with an intraday drop of more than 5%. The market price fell all the way. Under the influence of the cost side, the ethylene glycol market fluctuated widely in March.

Under the high cost, many foreign units were shut down for maintenance, the import resources contracted, the amount of cargo arriving at the port in the month decreased, the port began to go to the warehouse in a narrow range at the end of the month, superimposed with the shutdown and maintenance of a 720000 T / a ethylene glycol unit in South Asia, Taiwan, and the contract was reduced in April, which only maintained the supply of customers in South China, and the pressure on the supply side was relieved. At the same time, some domestic units were overhauled and reduced in load in April, and the overall commencement is expected to be corrected in a narrow range, However, in the short term, it is difficult to reverse the high domestic supply situation and curb the rising sentiment of the market.

Due to the recent frequent outbreaks in China, the implementation of sealing and control management in many provinces, the logistics and transportation are limited, and the terminal demand shrinks. However, the polyester start-up is stable above 90%. Under the high start-up, the inventory is accumulated, and the factory procurement is more cautious. The demand under the epidemic continues to be weak, showing a picture of low peak season as a whole. Under the pressure of high inventory, some factories have negative expectations recently, and the market is constantly worried about demand.

On the whole, the high cost side is strong and the support is strong. At present, the supply and demand side dominates the market, and the terminal orders are poor. There is a strong negative expectation for polyester in the downstream of high inventory pressure, and the demand side is empty. However, there is a callback expectation for the commencement of domestic units in April, and the market sentiment will rise.