At present, although ethylene glycol is suffering serious losses and the operating load of enterprises is at a low level, high port inventories have made up for the shortage of supply. However, in the context of insufficient new orders in the terminal weaving industry, the subsequent demand for ethylene glycol will weaken, and prices will be difficult to change the weak pattern.
From the supply side, the current domestic ethylene glycol production and operation conditions are still not ideal, especially the coal-to-ethylene glycol unit has suffered serious losses, resulting in low operating load of the domestic ethylene glycol unit. As of March 17, the operating load of domestic ethylene glycol units was 55.61%, down 4.27 percentage points from the same period last year; the operating load of petroleum-to-ethylene glycol units was 62.82%, down 4.18 percentage points from the same period last year; coal-to-ethylene glycol The operating load of the device was 45.68%, a decrease of 4.13 percentage points from the same period last year; the operating load of the methanol-to-ethylene glycol device was 32.86%, a decrease of 27.37 percentage points from the same period last year. At present, the overall efficiency of the ethylene glycol plant is poor, the production enthusiasm of enterprises is insufficient, the operating load is even lower than the level before the Spring Festival, and the overall supply is weak.
Although the operating load of ethylene glycol is low, due to weak demand, ethylene glycol port inventory is still high. As of March 16, the inventory of ethylene glycol ports in East China reached 1.0025 million tons, an increase of 45,000 tons and 4.7% year-on-year. Ethylene glycol port inventories have declined slightly in the past two weeks, but overall remain at a high level. When the operating load is low, high inventory will make up for the tight supply caused by the low operating load, and the industry will be under greater pressure to destock.
From the demand side, at the end of January, with the recovery of domestic demand, the start-up load of the weaving industry at the end of the chemical fiber industry chain increased significantly. As of March 17, the operating load of the domestic polyester industry was 84%, a decrease of 7.2 percentage points from the same period last year; the operating load of the weaving industry was 73%, an increase of 5 percentage points from the same period last year. Since the second half of last year, due to weak demand, the inventory of the polyester industry has been significantly overstocked. However, with the relaxation of epidemic control measures and the steady recovery of the domestic economy, the destocking process in the polyester industry has accelerated. As of the week of March 16, polyester filament POY inventory was 22.5 days, down 4 days from the same period last year, down 15.09% year-on-year; polyester filament DTY inventory was 28.3 days, down 2.7 days from the same period last year, down 8.71% year-on-year; Polyester filament FDY inventory is 22.3 days, a decrease of 5.2 days compared with the same period last year, and a year-on-year decrease of 18.91%. Polyester filament inventories have fallen across the board, reducing the pressure on polyester companies to destock. However, as early-stage equipment is gradually restarted, the recovery rate of polyester production loads will slow down. Considering that the current profits of polyester are not ideal, except for bottle flakes and polyester filament DTY, the production of other polyester products is mostly at a loss, so the sustainability of the recovery in polyester demand is doubtful.
Due to the recovery of domestic demand in the terminal weaving industry, overall orders have increased. Many companies have begun to take the initiative to replenish goods, and the operating load of the weaving industry has increased significantly. However, the current weaving operations are mainly focused on completing early orders, and the delivery of these orders is concentrated at the end of March. At present, the follow-up of follow-up orders is limited, foreign trade orders are insufficient, and domestic trade orders are also small. There may be gaps in follow-up orders.
To sum up, ethylene glycol is currently in a state of cost support at the bottom and suppressed by oversupply at the top, making it difficult to get out of the trend market. In the short term, the continued decline in crude oil prices has improved the production and operating conditions of oil-based ethylene glycol, and also increased the elasticity of downward prices. In terms of supply and demand, terminal weaving, which has shown good results in the early stage, may suffer from insufficient orders in the future, which will lead to further weakening of ethylene glycol prices.
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