In mid-September, after ethylene glycol successfully broke through the resistance level of 4,500 yuan/ton, the market entered a new box operation again. The market’s lower support was 4,500-4,550 yuan/ton, and it faced another challenge above 4,650. Huge selling pressure, although during this period the effect of production reductions at ethylene glycol plants was concentrated, and inventories at the main port continued to decline. On the other hand, downstream polyester plants entered the traditional peak season. The supply and demand side of glycol has reached its best state this year.
The current relative price of ethylene glycol is relatively low, and the positive factors such as supply and demand, coupled with the depreciation of the RMB exchange rate and increased import costs, have not pushed the market to continue to rise. This mainly comes from the macro perspective and the inconsistencies in the Sino-US trade war. The determining factor is always a worry for the bulls, and the overall downward trend of the chemical market will hardly make ethylene glycol have a single trend.
However, the negative macroeconomic situation has been greatly alleviated since last Friday. The People’s Bank of China lowered the deposit reserve interest rate by 0.5 basis points. After continuous rebounds, crude oil has now changed from a downward trend to an upward trend. Chemical commodities have also shown signs of rising. After showing signs of stabilizing and rebounding, the positive supply and demand side continues to ferment, coupled with the warming of the macroeconomic situation, after ethylene glycol strongly broke through the upper track of the box last Friday, a new round of upward trend was re-formed, but considering that ethylene glycol The supply and demand structure of diol in the future is a severely surplus product. The current short-term supply shortage is mainly caused by factories reducing costs under cost pressure. If the profit level of factories increases too quickly, it will inevitably stimulate factories that have reduced their load or are undergoing maintenance to increase their load. This is also The current significant discount for ethylene glycol far-month goods relative to near-month goods is an important reason.
Through the above analysis, the trend is near strong and far weak, but the current 1-5 basis has increased significantly recently and has entered a relatively high position. Therefore, there is a certain risk in intervening in the 1-5 positive set at this point. At present, It is appropriate to intervene in long orders on dips in recent months, because even if the load of ethylene glycol plants increases, the tight supply situation will still be difficult to change significantly in the short term.
