2.7%! After five days, ethylene glycol futures rose strongly again!
Except for ethylene glycol performance In addition to good performance, the polyester raw material market has also been booming recently, with various products rebounding…
Crude oil boosted, PTA futures rose for 3 consecutive days
Recently, OPEC and non-OPEC major oil-producing country Russia reached a new production reduction agreement, agreeing to reduce production by an additional 500,000 barrels per day starting from January next year. Boosted by this good news, international crude oil achieved a “five-day rise” “.
Buoyed by the positive performance of crude oil, the PTA market stopped falling and rebounded, with futures returning to 4,800 points. Since last Thursday, boosted by the urgent need for replenishment of crude oil and downstream weaving and the recovery of polyester production and sales, PTA has risen for two consecutive days, and the internal price has also risen to more than 4,800 yuan/ton.
Extended until this Monday, PTA continues Rally. As of the close on the afternoon of the 9th, Zhengzhou Commodity Exchange PTA futures closed higher, with the main 2001 contract closing at 4,820 yuan/ton, an increase of 28 yuan/ton, or 0.58%, compared with the settlement price on the previous trading day.
Spot tightening, B2 Alcohol futures rose to 2.7%
At the beginning of this week, ethylene glycol futures rose by more than 3% at the opening. Subsequently, ethylene glycol futures rose by more than 3%. Although futures prices fell slightly, as of the afternoon close, the main ethylene glycol 2001 contract closed at 4,787 yuan/ton, an increase of 2.7%.
In this year’s market situation, after just five days, ethylene glycol futures rose by more than 2%, thanks to the ethylene glycol port of low inventory. In actual terms, ethylene glycol is currently basically in balance between supply and demand. However, due to poor port weather and the continuous closure of major ports in East China such as Ningbo and Zhangjiagang, the arrival of ethylene glycol has been delayed, and the inventory in the port warehouse itself is low. Under the tight spot supply, ethylene glycol spot prices have risen strongly, and futures prices have followed suit.
At present, it is nearing the end of the year , the polyester raw material market seems to be showing signs of recovery, but how long can this market last?
Crude oil is negative There are many factors
Currently, the United States is facing an election and political relations are tense. Crude oil is the source of polyester products. Any news will affect the price of crude oil. Trend; at the same time, China, as the largest oil consumer, has recently had tense relations with the United States, which will be a major negative for crude oil.
The action to reduce crude oil production is on the one hand to cope with the possibility that some countries, led by the United States, the world’s largest oil producer, that have not participated in the production reduction agreement will increase production next year; to cope with declining demand. However, since the joint production cuts began in 2017, the implementation rate has been the biggest problem facing the production reduction actions. Although Saudi Arabia continues to reduce production by an additional 400,000 barrels per day on the basis of its production quota, Russian oil production is still higher than Russia and oil output. According to the quotas agreed by the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing countries, crude oil supply still maintains growth, and this production reduction agreement is only three months old. It does not rule out that the next production reduction agreement will proceed smoothly, and there are still many negative factors for crude oil.
PTA inventory is at a high level during the year
From the supply side Look, PTA supply remains stable at present: on December 7, Hanbang Petrochemical’s 2.2 million tons PTA unit was scheduled to be overhauled for one week, but Hengli Petrochemical’s 2.2 million tons PTA unit was restarted on the 6th, and Pengwei Petrochemical’s 900,000 tons PTA unit It has returned to normal after falling by 50% last week.
However, it is worth noting that the current PTA inventory is around 1.266 million tons, which is still at a high level during the year. As the end of the year approaches, downstream weaving manufacturers will experience poor prices this year due to poor market conditions. The holiday is early. Due to financial and other pressures, the demand for raw polyester filament is not strong. The operating rate of polyester will further decrease, and the demand for raw material PTA will decrease. With low demand and high inventory, PTA will continue to accumulate inventory, and the upward trend will be difficult to continue. .
Insufficient downstream demand for ethylene glycol
Ethylene glycol is considered the second half�A “dark horse” in the polyester market. Although prices continue to decline, the low inventory in the past three years has supported the ethylene glycol market from falling too sharply. At present, the inventory of ethylene glycol in East China ports has dropped to less than 450,000 tons. Although cargoes continue to arrive at the port, some ports have frequently closed sailings and the inventory has recovered slowly. In addition, the release of new production capacity in the market is still expected to be delayed, supply output is relatively limited, and the focus of ethylene glycol prices remains tight in the short term.
But the biggest negative for ethylene glycol comes from the weakening of demand. The current operating rate of polyester factories is around 90%, but towards the end of the year, as usual, polyester factories have to reduce their load and suspend production. Before 2016, the operating rate of polyester factories dropped to about 60%; before 2017, the operating rate of polyester factories dropped to 78%; before 2018, the operating rate of polyester factories dropped to about 73%. Moreover, the operating rate of polyester factories is still not high in a short period of time after the start of the new year, and the decline in operating rate suppresses the ethylene glycol market atmosphere.
It can be seen, whether from a macro or micro perspective On the other hand, the polyester market is still in a mixed bull-short situation, so you need to be cautious whether you buy the bottom or wait and see. Against the background of weakening demand, it is still difficult for the polyester market to break through its own pattern in the short term.
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