Ethylene glycol prices begin to rebound and stop falling
In August, the price of ethylene glycol began to rebound and stop falling. According to data from Shengyi Society, as of August 22, the average price of domestic oil to ethylene glycol was 4585 yuan/ton, an increase of 0.26% from the beginning of the week. The prices in each region are as follows:
The spot price range for mainstream manufacturers in East China is 4600-4900 yuan/ton; The spot price of ethylene glycol in the South China market is 4550 yuan/ton, and the mainstream manufacturers in Central China have a spot price range of 4550 yuan/ton for external execution.
The basis of the spot contract for ethylene glycol at the port on August 22, 2024 is close to low and far from high. The basis quotation for the 09 contract this week is+43 to+47; The basis of forward contracts is relatively strong, with a basis price of 70-74 yuan/ton in September. At present, the basis price for the 01 contract has started to be quoted, and the basis price for September will be 0-4 yuan/ton.
On August 22nd, the price of coal to ethylene glycol remained basically stable, with a domestic price range of 4150-4330 yuan/ton, including tax.
On August 21, 2024, the external price of ethylene glycol was as follows: the landed price in China was 553 US dollars/ton, and the landed price in Southeast Asia was 550 US dollars/ton. The domestic landed price has slightly increased.
Reasons for the rebound in ethylene glycol prices this week:
1. Digestion of the expected rebound in port inventory in the early stage
The mid month market has sufficient expectations for the expected increase in port arrival volume, and the expected accumulation of trading inventory in the early stages of the market has led to a decline in prices. Recently, there has been some reflection in inventory data. On August 22, 2024, the total spot inventory of ethylene glycol in the main port of East China was 681200 tons, an increase of 66300 tons from the total spot inventory of ethylene glycol in the main port of East China on August 15, which was 614900 tons. The expectation of subsequent imports arriving at the port has weakened, and the negative effects brought by concentrated arrivals have been digested in the early stage.
2. The supply-demand situation has improved
On the demand side, downstream demand is expected to be strong during the peak season, with the turning point of the golden September and silver October peak season, and downstream operating rates are expected to improve. On the supply side, there is a favorable price difference for the conversion to EO, and there is a strong expectation for some ethylene glycol production capacity to be converted.
Future expectations
At present, the absolute amount of explicit inventory in ports is still relatively low. Although there has been a slight accumulation of inventory recently, there is not much room for inventory to continue to rise. The main considerations are as follows:
1. Polyester production is recovering, with active procurement at low prices;
2. The overseas supply has been weak, mainly due to the relatively concentrated arrival of contracted goods at the port in the second half of August. However, since September, there has been a shortage of external shipments of ethylene glycol, mainly due to the shutdown of some facilities in Saudi Arabia due to gas shortage since mid to late July, resulting in a significant reduction in Saudi supply;
Therefore, in the short term, the fluctuation of ethylene glycol prices is the main trend, and there will be support for ethylene glycol prices in the future.
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