After midday trading on the 26th, boosted by the good news from all parties, the main PTA 1909 contract rose sharply by 220 yuan/ton, an increase of 3.89%! The market is in turmoil!
As the “brother” of PTA, recently, driven by the rise in PTA prices, ethylene glycol has reversed its decline and has risen sharply!
As of the close of the 24th, the main 1909 contract of ethylene glycol futures on the Dalian Commodity Exchange closed at 4567 yuan/ton, which was a significant increase of 98% compared with the settlement price of the previous trading day. Yuan/ton, an increase of 2.19%!
Since the beginning of this year, ethylene glycol has been It has been falling continuously and has been labeled as a “bad guy who cannot be helped”, especially in terms of profits. Since March this year, ethylene glycol profits have been in a loss stage. In mid-May, they once fell to -$97/ton. Compared with US$109/ton in January, the drop is as high as US$206/ton! This makes the market have a bearish attitude towards ethylene glycol!
This time, ethylene glycol has bucked the trend and made a huge comeback, which is the result of favorable resonance from many parties.
1. Rising crude oil drives ethylene glycol market
In the recent period, U.S. crude oil has risen sharply due to factors such as the escalation of tensions in the Middle East, the easing of Sino-U.S. trade sentiment, the Federal Reserve’s signal to cut interest rates, and the reduction of U.S. crude oil inventories. At the close of trading on the 20th, the price of light crude oil futures for July delivery on the New York Mercantile Exchange rose $2.89 to close at $56.65 per barrel, an increase of 5.38%! This is the largest single-day increase since December last year!
The rise in crude oil drove the rise in ethylene glycol. On the 20th, the MEG futures of Dalian Commodity Exchange opened sharply higher. The main 1909 contract closed at 4,487 yuan/ton, which was the same as the previous trading day. Compared with the settlement price, it has increased significantly by 25 yuan/ton, an increase of 0.56%!
2. “Brother” PTA boosts the price of ethylene glycol
Ethylene glycol and PTA act as The “brothers” of the same ancestry but different origins in the polyester industry chain, every move involves the sensitive nerves of the industry chain. Since January this year, the “two brothers” have been going in opposite directions. Although the prices of the two are sometimes in sync, they are both at the same level. However, in terms of profits, ethylene glycol obviously cannot keep up with PTA. Although PTA prices were once on the verge of loss, they have rebounded rapidly and are currently around 1,058 yuan/ton.
With the help of external factors, PTA has also “pulled” when it has risen in recent stages. Ethylene glycol. On the 18th, PTA rose by 2.46%. At the same time, ethylene glycol futures began to rise, rising sharply by 44 yuan/ton. This kind of increase is not common on the ethylene glycol trend chart this year!
3. Reduction in port inventories led to a sharp recovery in ethylene glycol
The continued decline in ethylene glycol stocks is the main reason why its price has begun to rise. According to statistics, my country’s ethylene glycol port stocks are decreasing. The ethylene glycol port stocks in East China are about 1.155 million tons. A month-on-month decrease of 43,000 tons. Among them, Zhangjiagang 82.5 tons, a month-on-month decrease of 29,000 tons; Ningbo 91,000 tons, a month-on-month decrease of 9,000 tons; Taicang 95,000 tons, a month-on-month decrease of 21,000 tons; Jiangyin 29,000 tons, a month-on-month decrease of 1,000 tons.
At the same time, domestic ethylene glycol entered the maintenance season in April and May, and the comprehensive operating rate fell to around 68%. Among them, the operating load of coal-based ethylene glycol fell back to a low of 52%, and the operating rate The decline prompted a reduction in ethylene glycol production capacity. In addition, some time ago, downstream weaving companies carried out a wave of raw material procurement operations, and the production and sales of polyester yarn were good, which further promoted the destocking of ethylene glycol.
At present, ethylene glycol has ushered in the With the short-term rebound and the fact that the second half of the year is the traditional peak season, the progress of ethylene glycol destocking may be accelerated. While prices are rising, factory profits have begun to rebound. At the end of June, some maintenance equipment was restarted. Sufficient supply will also inhibit the rebound space of the ethylene glycol spot market.
Generally speaking, port inventories are still at a high level. In the next few years, domestic ethylene glycol production capacity will continue to increase and will always be in a state of overcapacity. Therefore, the good ethylene glycol market In the end, it still depends on the demand of the end market!
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