Ethylene Glycol Prices Surged Sharply In December, Expected To Decline In January.

Ethylene glycol in 2019, or is a steady decline, or steady rise, in December, it is abnormal, a sharp rise, the market negotiation once reached 6000 yuan / ton height, not long, rapid decline, the bottom has not yet seen, at present 5000 yuan / ton fluctuation. What is the demon of ethylene glycol? Let me summarize it and predict the market next month.

Market overview in December

Fig. 1 price chart of domestic glycol Market

Source: lung Chung

In December, the domestic glycol market got rid of the dull trend, and the price entered a fast lane. The good macroeconomic and the strong shocks of crude oil will drive the commodity market atmosphere to warm up next month to boost market sentiment. Moreover, the stock of basic dock has reached a low level. In the other month, the closure of the terminal and the pollution of cargo ships aggravated the tension of the shortage of cargo. At this point, although the polyester plant maintenance plan has been clear, but the current high starting to maintain, just need to be robust, in the first half of the month just need replenishment and delivery demand, ethylene glycol spot surged, the base pulled up to 700 above, the spot market reached a maximum turnover of 6000 yuan / ton. In the second half of the month, with the appearance of the turning point of the stock storage, the lifting of the load at the supply side and the fall of the polyester start-up in the lower reaches, the market price returned rationally, and the spot fell back to 5000, and the base shrinkage contracted to 400 within. In the same month, the average monthly price in the East China market closed at 5134 yuan / ton, up 11.05% from the previous month.

Current main port inventory

Fig. 2 Comparison Chart of main port inventory of ethylene glycol in China

Source: lung Chung

As of December 30th, the port of East China's main port area has about 436 thousand tons of ethylene glycol port. Among them, 187 thousand tons in Zhangjiagang, 73 thousand tons in Taicang, 93 thousand tons in Ningbo, 46 thousand tons in Shanghai and Changshu, and 37 thousand tons in Jiangyin.

In December, the comprehensive operation rate of ethylene glycol in China was 64.92%, and the monthly output was about 666 thousand and 700 tons. Of which, the start-up load of ethylene glycol was about 62.09%, and the monthly output was about 373 thousand and 500 tons. The load of coal glycol production was about 68.92%, the monthly output was about 293 thousand and 200 tons, and the overall domestic supply remained low. While the polyester terminal load at 84.1%, coupled with the low level of imports this month, the East China main port continued the pattern of storage, the highest 1 million 436 thousand tons in the year, compared with the lowest 394 thousand tons in the year, a decrease of 1 million 42 thousand tons, a decrease of 72.56%.

A bold supply and demand balance sheet

Table 1 domestic ethylene glycol supply and demand balance sheet

Unit: 10000 tons

	Ten month	Eleven month	Twelve month	One Month E	Two Month E	Three Month E
opening inventory	Fifty-four point four five	Forty-nine	Thirty-six point four four	Thirty-five point four five	Forty-three point eight three	Sixty-five point two four
yield	Sixty-six point four seven	Sixty-seven point three five	Sixty-six point six seven	Seventy-one point seven two	Seventy-four point zero seven	Seventy-seven point three seven
Import volume	Eighty point nine two	Seventy-nine point four eight	Eighty-two	Seventy-eight	Eighty-five	Eighty-three
Total supply	One hundred and forty-seven point three nine	One hundred and forty-six point eight three	One hundred and forty-eight point six seven	One hundred and forty-nine point seven two	One hundred and fifty-nine point zero seven	One hundred and sixty point three seven
Polyester demand	One hundred and fifty-one point three zero	One hundred and forty-five point one eight	One hundred and forty-four point eight four	One hundred and thirty point three two	One hundred and twenty-six point six three	One hundred and fifty-three point one zero
Export volume	Zero point zero three	Zero point zero three	Zero point zero three	Zero point zero three	Zero point zero three	Zero point zero three
Other requirements	Eleven	Eleven	Eleven	Eleven	Eleven	Eleven
Aggregate demand	One hundred and sixty-two point three three	One hundred and fifty-six point two one	One hundred and fifty-five point eight seven	One hundred and forty-one point three five	One hundred and thirty-seven point six six	One hundred and sixty-four point one three
Supply and demand gap	-14.94	-9.38	-7.20	Eight point three eight	Twenty-one point four one	-3.76
Ending inventory	Fifty point eight zero	Thirty-four point five three	Forty-two point six five	Thirty-five point four five	Forty-three point eight three	Sixty-five point two four

Source: lung Chung

Bold prediction in January

In January, the market trend of ethylene glycol is expected to be higher before and after the Spring Festival holiday. Outlying, oil price cut agreement and the impact of Sino US favorable stage is expected to maintain a high level of consolidation, and has a certain support for the trend of commodities. On the basis of ethylene glycol, there are accumulative absolute values on the basis of stock accumulation, which is supported by the need for stocking in the polyester factory. The price shocks in the first half of the month are strong. In the second half of the month, with the closure of the terminal weaving business, the start-up load of polyester is expected to decline significantly. Under the influence of the upward conduction of the industrial chain, it is expected that the price of ethylene glycol will fall down in the second half of the month, reflecting that the spot price market is expected to run at a range of 4700-5000 yuan / ton. (at the same time, we need to pay close attention to the negative impact of new installations such as Zhejiang Petrochemical, Hengli petrochemical and Rongxin on market emotional level).