Pressure Of Supply And Demand And Cost

In 2020, under the impact of global public health events, domestic ethylene glycol enterprises were forced to drop sharply due to the terminal shutdown of downstream polyester due to the impact of global public health events, and then the fermentation of overseas public health events in the later stage, which hindered the export of terminal foreign trade, forced the price of ethylene glycol market to drop sharply. Under the situation of new units being put into operation, the overall domestic supply increased, and the cost pressure, domestic ethylene glycol enterprises were promoted to varying degrees Although the domestic supply continues to be low, the contradiction between supply and demand is difficult to solve, and the price of ethylene glycol market is difficult to rise.

Figure 1 price trend of domestic ethylene glycol Market

Source: Longzhong information

In 2020, with the rapid decline of ethylene glycol price, the profits of all domestic ethylene glycol process routes will be swallowed up. Relatively speaking, naphtha integration and ethylene process based on crude oil can still maintain a small profit, but the methanol method and coal-based syngas route have been unable to withstand the pressure, showing a loss situation.

Table 1 maintenance schedule of domestic ethylene glycol plant

Unit: 10000 tons / day

Source: Longzhong information

Up to now, the domestic ethylene glycol production capacity base is 13.981 million tons, and the recent overhaul enterprises involve production capacity of 4.462 million tons; among them, the production capacity base of coal to ethylene glycol process route is 4.97 million tons, and the maintenance capacity is as high as 3.2 million tons. The average operating rate of enterprises in production was 50.92%, a record low. From July 3 to July 9, the weekly output is 150200 tons; the weekly output of downstream polyester is 1045800 tons, which is converted into a figure of 3500300 tons according to the proportion of ethylene glycol demand. From this figure, we can see that the market is in short supply. However, due to the low import cost, the overseas import source has increased on a month on month basis, and the weekly Hong Kong volume is about 200000 tons The former is in the trend of oversupply. Due to the limited tank capacity and unloading speed, the detention period has reached one week, so the supply side pressure is still relatively high in the long run.

Figure 2 Comparison trend of domestic ethylene glycol process market gross profit

Source: Longzhong information

According to Longzhong information statistics, as of July 8, the domestic ethylene glycol market maintained a weak consolidation situation. In recent years, the price of steam coal at the raw material end continued to strengthen, while the price of ethylene fell from a high level. The gross profit performance of various process markets was different, and the overall cost pressure was still heavy. Among them, the gross profit of coal to ethylene glycol market is - 1820 yuan / ton; methanol to glycol market is - 1266.7 yuan / ton; ethylene to ethylene glycol market is - 236 dollars / ton; naphtha to glycol market gross profit is - 46.32 dollars / ton.

Summary: In terms of overall supply and demand, due to the cost suppression, the import volume has increased, the overall supply of domestic ethylene glycol enterprises is low, and the downstream polyester just needs to be stable, which is still the pattern of oversupply. In addition, the short-term operation of domestic enterprises will continue to suffer from heavy losses. The downstream polyester entered the off-season, under the greater inventory pressure, the plan to reduce production and reduce negative load increased significantly. The ethylene glycol market is still difficult to improve, so we can only sigh.