After the Lunar New Year, a variety of chemical products have had a good start, with styrene, pure benzene, epoxy resin, etc. leading the way. The ethylene glycol market is also in tight supply. It rose rapidly under the support, and the spot transaction price reached a maximum of about 8,370 yuan/ton. However, the good times did not last long. As port inventories continued to increase, it was difficult to boost the market. In addition, the outlook for the polyester market was uncertain, and the ethylene glycol market began to decline after the middle of last week. According to monitoring data from Huicong Chemical Network, the average ex-factory price of ethylene glycol at domestic enterprises on February 3 was 8,055 yuan/ton, and as of February 10, the average price was 8,175 yuan/ton.
For the recent market, from a macro factor perspective, the current crude oil market is obviously entangled between long and short. Although the members of the Organization of the Petroleum Exporting Countries (OPEC) have fulfilled more than 90% of their production reduction commitments under the production reduction agreement, the confidence of bulls has been greatly encouraged, and oil prices have risen. It closed higher on Friday (February 10). The WTI March crude oil futures contract on the New York Mercantile Exchange closed up $0.86 at $53.86 a barrel. The April Brent crude oil futures contract on London’s Intercontinental Exchange closed up $1.07 at $56.70 a barrel.
However, data released by U.S. oil services company Baker Hughes on February 10 showed that the number of active drilling rigs in the United States increased by 8 to 591, continuing to hit a new high since October 2015 and rising for the fourth consecutive week. In addition, the stabilization and rebound of the US dollar has also limited the upside space of oil prices. The recent fluctuations in the crude oil market have been mainly weak.
From a cost perspective, Asia Ethylene surged for two consecutive weeks during the domestic Spring Festival and continued to surge after the holiday, boosting the ethylene glycol market. In the later period, February and March will be a period of intensive maintenance, and the market supply will be tight at that time. There is no possibility of a sharp decline in the short term, and the cost support for ethylene glycol still exists.
From the supply side, ethylene glycol installations in the Middle East, Japan, South Korea, and Taiwan involved extensive centralized maintenance in the first and second quarters. South Asia, Saudi Arabia, and Singapore Several sets of equipment have a month-long maintenance period, and the two major domestic factories in East China also have maintenance plans. In the long term, there will be a tight situation on the ethylene glycol supply side. However, the specific maintenance has not really started yet, and port inventories are increasing steadily. Although the overall level is still low, compared with before the holiday, the current low inventory is difficult to boost the ethylene glycol market. Therefore, the fundamentals The benefits are gradually fading.
On the demand side, the current downstream polyester production capacity has returned to about 79%, and the production and sales data have also performed well. On the 13th, filament production and sales were at 125%, and short fiber was at 150%. %-300%. The recent start-up of polyester factories will continue to rise, and the demand for ethylene glycol is expected to continue to pick up, which may provide greater support to the market.
In terms of related products, the PTA market maintained a volatile and strong trend. At the beginning of this week, the main PTA contract futures and East China spot prices both rose. The sharp increase in its cost-end PX supports the market, and the overall supply and demand fundamentals are favorable. The short-term PTA market will still maintain a warm and volatile pattern. As for the styrene market, there has been a strong rise since the holiday, but downstream demand is limited, and the market has corrected recently.
In summary, the ethylene glycol market has been bullish and short recently, and support from the cost side still exists. However, the macro crude oil market has encountered upward pressure, and the fundamental supply side The benefits have faded, while downstream demand is expected to continue to pick up. It is expected that in the short term, the ethylene glycol market will mainly fluctuate and consolidate, and there is the possibility of continued adjustment.
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