Introduction: Since August, the start-up load of the domestic ethylene glycol industry has increased significantly month-on-month. The total start-up in the industry has increased from 47.5% in early August to 61.31%; an increase of 13.81%; while the start-up in the coal industry has increased from 47.5% in early August to 61.31%. The trough of 25.17% moved up to the level of 53.85%, an increase of 28.68%; the start of construction in the non-coal industry increased moderately, from 59.56% in the previous period to the current 65.34%.
The upward movement of the price center is the main driver of the pick-up in construction starts.
Judging from the correlation between the start of the coal-to-ethylene glycol industry and price fluctuations, the trends of the two are The positive correlation increased from 57% at the end of 2019 to 78% in 2020, which to a certain extent also reflects that the ethylene glycol market has begun to enter the era of perfect competition on the supply side.
Since August, domestic ethylene glycol has gradually come out of the downturn, and the price center has steadily moved upward, gradually moving up from around 3,600 to a level above 3,800. Along with the steady rise in prices, the industry’s overall low operating situation has improved. As the integrated device currently mainly produces EO, the overall tendency of EG is not high, and the overall start-up fluctuation of the industry is limited. The start-up curve of the coal-to-ethylene glycol industry fluctuated widely, with the start-up rate rising rapidly from a historical low of 25.17% during the year to a level of 53.85%. Troubleshooting and price pressure to avoid risks are the main reasons for the historically low industry start-up.
From the perspective of the expected start of construction in the later period – price is still the key point affecting the start of construction. However, in the fourth quarter, we are facing long-term contract negotiations. There is support at the bottom and resistance at the beginning of the industry.
At present, the total production capacity of the domestic ethylene glycol industry is 4.87 million tons, and the production capacity is 1.69 million tons during parking. The company’s capacity to restart in the later stage is 670,000 tons), and the planned capacity to be maintained in the later stage is 300,000 tons. If the new production capacity is not included for the time being, the highest and most optimistic estimate for the start-up of the coal-to-ethylene glycol industry will increase to around 66% , daily output is expected to move up to 10,800 tons; however, based on the probability of device restart, 58%-59% of industry starts may be the upper limit of this wave of industry start-up rebound.
From an extended perspective, the main tone of domestic integrated devices converting to EO and reducing EG operation due to profit considerations during the year will not change. However, starting from the fourth quarter, due to the contraction of demand in the EO industry, storage and Due to the impact of transportation restrictions, it is expected that the start-up load of the integrated industry will increase slightly, with an upper limit of 67%-68%. </p
