The price of ethylene glycol rose in January
The price of ethylene glycol increased in January. According to data from Business Society, as of January 23, the average price of domestic oil to ethylene glycol was 4536.67 yuan/ton, an increase of 5.32% from the beginning of the month. Prices in various regions are as follows:
The price range for spot goods executed by mainstream manufacturers in East China is between 4600-4700 yuan/ton; The spot price of ethylene glycol in the South China market is 4550 yuan/ton, while the mainstream spot manufacturers in Central China have a price range of 4500 yuan/ton for external execution; The mainstream manufacturers in North China offer a spot price of 4500 yuan/ton for external transactions.
The price of ethylene glycol has risen significantly since December 2023 due to the impact of overseas device news and continuous inventory depletion. Currently, the price has exceeded the highest level in 2023, with an increase of 9.76% compared to the quotation on December 15th.
Continuous month on month inventory removal
As of January 22, 2024, the inventory of ethylene glycol in the main port of East China was 884900 tons, which was 1225500 tons higher than the high inventory level (December 7, 2023), and continued to decline unilaterally by 340600 tons.
The continuous month on month inventory removal at the port is mainly due to overseas equipment maintenance, but the arrival volume is relatively low. According to market news, among overseas ethylene glycol units, Saudi Arabia has resumed work on one 700000 ton/year unit in mid January, and the other four units are still under maintenance; On the US side, 1.46 million units per year have been shut down due to the impact of the cold wave. Specifically, the 360000 ton South Asia No.1 plant in the United States was shut down this week due to a preventive cold wave, and the plant was recently restarted due to heating up. The other set of 828000 ton unit has been shut down for maintenance since December 23, and the catalyst will be replaced by the end of February. It is planned to restart by the end of March; The 260000 ton/year ethylene glycol unit of Sasol in the United States was shut down on January 16th, while another 360000 ton/year ethylene glycol unit of Indorama was shut down on January 17th.
The downward movement of domestic inventory is the main data support for the recent rise in ethylene glycol prices. However, in the later stage, attention should still be paid to the sustainability of the impact of the US cold wave on the installation, whether the Saudi installation will resume work early, and the changes in the impact of the Red Sea incident on domestic shipping.
The operating rate of domestic facilities has rebounded due to the impact of rising prices; The production in December 2023 reached 1.465 million tons, an increase of 4.6% compared to the previous month.
In terms of imports and exports, the monthly import volume of ethylene glycol in China in December 2023 was 580400 tons, with a cumulative import volume of 7.148 million tons. The import volume decreased by 16.28% month on month, increased by 4.78% year-on-year, and the cumulative import volume decreased by 4.83% compared to the same period last year.
Downstream demand off-season expectations
The current operating rate of downstream polyester is around 80%, and as the Spring Festival approaches, it may gradually enter the spring inspection.
Future expectations
The main variables currently affecting the price of ethylene glycol are whether the implementation of import volume reduction has been realized, and whether the underlying cost support brought about by crude oil and coal prices will shift.
The supply and demand fundamentals of ethylene glycol are still in a weak state, and loose inventory has opened up upward space. However, considering that there has been a significant increase in prices, we will focus on the negative feedback effect of terminal demand variables on raw materials in the future. It is expected that ethylene glycol prices will fluctuate mainly in the short term.
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