At present, although the start-up load of ethylene glycol has rebounded significantly, port inventories continue to decline, coupled with the recovery in the start-up load of the downstream polyester and terminal weaving industries, companies have a strong willingness to replenish their inventories. Therefore, the supply and demand pattern of ethylene glycol has improved, and the rebound is expected to continue.
Start-up load rebounded significantly
Recently, the operating conditions of ethylene glycol production companies have continued to be poor, but they are significantly better than the same period last year. As of July 6, the gross profit of ethylene glycol produced by domestic integrated equipment was -115 yuan/ton, the gross profit of coal-based ethylene glycol was -1,400 yuan/ton, and the gross profit of MTO-based ethylene glycol was -1,435 yuan/ton. , while the profits of the above-mentioned processes in the same period last year were -280 yuan/ton, -2375 yuan/ton, and -1660 yuan/ton respectively. As this year’s operating conditions are better than the same period last year, the domestic ethylene glycol operating load this year has increased slightly compared with the same period last year. As of July 7, the domestic comprehensive operating load of ethylene glycol was 57.12%, an increase of 1.41 percentage points from the same period last year. Among them, the operating load of coal-to-ethylene glycol is 48.33%, an increase of 4.12 percentage points from the same period last year; the operating load of petroleum-to-ethylene glycol is 62.47%, a decrease of 2.87 percentage points from the same period last year; the operating load of methanol-to-ethylene glycol is 49.15% , an increase of 9.78 percentage points compared with the same period last year.
Since May, the domestic ethylene glycol operating load has rebounded by 10 percentage points from lows. The current weekly output remains at around 350,000 tons, and the overall supply is sufficient. In the short term, due to the expansion of corporate losses month-on-month and the maintenance of some equipment, the supply of ethylene glycol will decline slightly. However, the operating load has rebounded significantly, and the market supply is still sufficient. Once the price rebounds and profits are restored, the supply of ethylene glycol will Price elasticity is greater and supply will increase.
Downstream has strong willingness to replenish its inventory
With the recovery of domestic textile industry orders, the operating load of the polyester and weaving industries downstream of the chemical fiber industry chain has rebounded significantly. As of July 7, the operating load of the domestic polyester industry was 89.93%, an increase of 10.1 percentage points from the same period last year; the operating load of the weaving industry was 75%, an increase of 25 percentage points from the same period last year.
At present, the profits of the domestic polyester industry are acceptable. Polyester chips and polyester filament FDY and DTY are in a profitable state, while bottle flakes and staple fiber are still in a loss-making state, among which the operating conditions of bottle flakes have declined significantly. Overall, the operating conditions of downstream polyester have not improved significantly compared with the same period last year. However, the current market atmosphere is good, and downstream companies are increasingly expecting the market to improve in the second half of the year. Many downstream weaving companies are taking the initiative to increase raw material inventories while just needing to stock up, which has boosted the demand for ethylene glycol.
In addition, the inventory of polyester filament downstream of ethylene glycol has dropped significantly. As of July 6, polyester filament POY inventory was 13.7 days, down 22 days from the same period last year, down 61.62% year-on-year; polyester filament DTY inventory was 24.8 days, down 16.7 days from the same period last year, down 40.24% year-on-year; polyester long Silk FDY inventory is 18.5 days, a decrease of 15.6 days compared with the same period last year, and a year-on-year decrease of 45.75%. The decline in filament inventory indicates that consumption in the chemical fiber industry is recovering or inventory is being conducted downward, which will help boost downstream replenishment.
Based on the above, the current fundamentals of ethylene glycol have improved: on the supply side, the domestic ethylene glycol operating load has rebounded, but port inventories have declined; on the demand side, the downstream polyester and weaving industry operating loads have rebounded significantly, and downstream inventories are low. Library willingness is strong. Based on the above judgment, the author believes that the supply and demand margins of ethylene glycol are improving and is expected to continue the recent rebound trend.