Ethylene glycol prices fall in November
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The price of ethylene glycol slightly increased in December. According to data from Shengyi Society, as of December 6th, the average price of domestic oil to ethylene glycol was 4613.33 yuan/ton, an increase of 0.47% from the average price of 4591.67 yuan/ton on December 1st.
In the morning session, spot contract traders had good trading. After the market rose, there was an increase in spot contract shippers, and receiving traders were cautious and afraid of high prices. They did not receive many orders, and the market trading was relatively weak. During the trading session, the main focus was on high priced shipments from base traders.
On December 6th, the price of coal to ethylene glycol remained basically stable, with prices in the northwest region ranging from 4240-4350 yuan/ton, including taxes.
On December 5, 2024, the external price of ethylene glycol was as follows: the landed price in China was $543/ton, and the landed price in Southeast Asia was $550/ton.
Strong domestic supply and weak demand for ethylene glycol remain unchanged
In December, the domestic supply and demand fundamentals of ethylene glycol maintained a pattern of strong supply and weak demand. The domestic supply of ethylene glycol has increased month on month, and the operating rate has remained relatively high. In terms of demand, the downstream polyester load is relatively high, and the filament maintains a high operating load, with little room for further improvement. The loading and weaving loads are weakening. Terminal autumn and winter orders have still fallen short of expectations in the near future, with expectations of a weakened polyester load in December.
Approaching the Spring Festival (January), it is highly likely that the operating rate of downstream polyester plants will decrease, and terminal weaving orders will fall. Terminal manufacturers will gradually enter a state of production reduction, shutdown, and holiday shutdown by the end of December, and polyester will gradually enter a state of accumulated inventory. Recently, downstream filament and splicing factories have gradually begun to release maintenance plans, and there are signs of a decline in downstream operating rates.
Domestic supply, especially with the return of Zhenhai Refining and Chemical Equipment in Jiangsu and Zhejiang provinces, coupled with the incremental release of production capacity in Xinjiang, Inner Mongolia and other regions. There is an increase in domestic supply. In the medium to long term, with the increase in supply of coal to ethylene glycol and the production of raw material ethylene, domestic supply is in an upward phase.
The dependence on domestic ethylene glycol imports has decreased
The dependence on imported ethylene glycol is gradually decreasing with the release of domestic production capacity. Recently, the explicit inventory data of ethylene glycol has been relatively low. On the one hand, this is because the port inventory does not include the hidden inventory of domestic production areas and factories. On the other hand, it is also because downstream manufacturers had sufficient stock at low prices in November, and the port has been affected by weather recently, resulting in delayed unloading due to port closures. With the gradual unloading and arrival of ocean going large ships, the explicit inventory is also expected to rebound.
Future expectations
The weak domestic supply and demand fundamentals of ethylene glycol have suppressed the upward potential of ethylene glycol prices. From a cost perspective, crude oil prices have been at a low level recently, and the support from the cost side is relatively insufficient. At present, although there is an expected increase in explicit inventory at the port, the absolute data is relatively low, which to some extent supports the price of ethylene glycol. In the short term, the fluctuation of ethylene glycol prices is mainly weak.
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