Review of ethylene glycol market operation in 2019

MEG price Trend

In the market price wide shocks mainly. The absolute price of ethylene glycol lower overall trend in line with the fundamental logic. In the first half of the year, the price center of gravity of ethylene glycol dropped, the obvious inventory high and far month production pressure is obvious. In the second half of the year, the reality of ethylene glycol tight and weak expectations game, the price center of gravity wide shock. In spite of the rebound in the commodity market and the temporary shutdown of the Taiwan plant, ethylene glycol rebounded weakly under the pressure of high inventory, and the follow-up strength of the spot market was limited.

   In May, the glycol market was "V" - shaped trend, the overall trading floor is fair. In the first half of the month, due to the aggravation of trade frictions between China and the United States, the market sentiment turned bearish, and the spot fell to below RMB 4,200 / ton. In the second half of the year, the price of ethylene glycol low center of gravity stabilized slightly rebound, low price operation of ethylene glycol supply and demand pattern repair, some traders to fill the active spot market has been tightened. June - July, ethylene glycol market bottom finishing. In June, glycol price center of gravity firm up, active spot market transaction, futures spot price spreads significantly narrowed. In the process of inventory destocking, some polyester factories purchased spot goods at a low level, and the spot market traded at a high level to around 4500 yuan/ton. In July, the price of ethylene glycol price center of gravity shock rise, the market discussion is fair. Among them by the market individual main body agreement to close the impact of the spot market, the spot market to pick up gas, can be transferred to a tight spot. Spot prices firm up to 4680 yuan/ton near, but the market mentality is more cautious, meet the intention to increase significantly, the end of the market price moderate retreat. August - October, ethylene glycol price center of gravity fell back. In August, the price of ethylene glycol fluctuates upward, the goods delivered in the market is relatively small, and the strong typhoon has obvious influence on the closure of shipping. In the short term, the spot can be transferred within the market contraction, and the market mentality has been boosted. At the same time ethylene glycol destocking logic continued, the rapid decline of the port inventory, the floor to follow up the obvious, the spot price chasing up at 4650-4660 yuan/ton near. In September, when ethylene glycol prices spiked, oil and energy-related commodities jumped after an attack at a Saudi oil field during the Mid-Autumn festival holiday, resulting in a sharp drop in crude and associated gas production. Under the influence of the news, the market sentiment of ethylene glycol was fermented significantly. The term spot prices rose significantly, and the price characteristics of the spot high by negotiation had reached 5500 yuan/ton. Then the ethylene glycol fell back to adjust, the site profit on the stock action is obvious, in addition to the Saudi oil fields to the end of the month can resume the impact of the news, the market mentality back to rational. October glycol price center of gravity fell the overall market shipping intention is concentrated. After the festival regression, glycol price weight. In November, the price of ethylene glycol shock firm, the basic reflection of the reality of tight logic. Early a week, the price of ethylene glycol shock downward, the market negotiation is general, the spot mainstream basis around the price of 45-55 yuan/ton, the floor to follow up carefully. Spot back to 4450 yuan/ton near the low buying gas concentration is obvious. In the middle of the day, the price of ethylene glycol increased significantly, the market price of ethylene glycol rose significantly, the exchange spot spot tightening, traders actively follow up, spot price high transaction to 4750 yuan/ton, delivery period glycol price center of gravity high firm, spot basis strengthened to 150 yuan/ton near. By the end of the month, due to the pollution of ethylene glycol cargo and the delay news, the inventory in the main port area of East China was again at a low level. The price center of gravity of ethylene glycol was mainly adjusted, and the 1-5 price difference widened to around 140-150 yuan/ton.

      From January to November 2019, the average prices of CCF MEG were RMB 4,709.82 / ton and US $572.39 / ton, respectively, which decreased by RMB 2,665.81 / ton and US $348.31 / ton from the same period in 2018.

    From January to November 2019, the average load of ethylene glycol units in China was 71.18%, among which the average load of ethylene glycol units from coal to coal was 65.32%. In the year, the operating load of ethylene glycol went down significantly in the second quarter. On the one hand, spring inspection was carried out on the ethylene glycol unit; on the other hand, when the absolute price of ethylene glycol went down, the switching of relevant products in the traditional unit was obvious, and the maintenance time of the coal unit was extended.

From January to November of 2019, the annual domestic production of ethylene glycol was about 6.947 million tons, an increase of 464,000 tons, an increase of 7.2%. The cumulative production of ethylene glycol from coal to coal in Qi was about 2.663 million tons, an increase of about 526 million tons, an increase of about 24.6%, compared with the same period of last year.

Abroad, the import of goods is still an important supply of the domestic market. MEG's price focus in China was low during the year, but its huge demand for polyester still led to a large quantity of goods being shipped to China. In addition, the foreign market ethylene glycol production capacity concentrated, North America and other places ethylene glycol overcapacity is obvious. Since the second half of the year, the price center of Chinese ethylene glycol is relatively on the high side of the global market.

It is estimated that by the end of December 2019 MEG social inventory will decline slightly compared with the end of 2018, with the overall range of 250,000 to 300,000 tons, among which MEG inventory in major ports in East China will decline simultaneously.

In 2019, the ethylene glycol supply and demand pattern showed a small destocking and entered the continuous destocking channel from May. In December, the supply and demand pattern showed a moderate inflection point, but the overall accumulative quantity was limited. From January to April, the accumulative inventory of ethylene glycol was obvious, the overall range was around 700,000-750,000 tons, and the explicit inventory went up simultaneously. In mid-April, the inventory of ethylene glycol in east China main port went up to more than 1.4 million tons. It is mainly affected by the rapid expansion of supply port and the limited growth rate of demand link. Since May, the absolute price of ethylene glycol has been at a low level, the reduction and shutdown of domestic and foreign installations has been frequent, and the supply end has been greatly contracted. Among them, the monthly contraction of syngas production link is around 100,000 tons, and ethylene glycol enters the destocking channel. From December, ethylene glycol will be moderately accumulated, mainly by the end of the polyester plant maintenance caused by the shrinkage in demand.