puttputtbingo| South China MEG equipment warms up and restarts: production and sales in the ethylene glycol market are sluggish, and prices are weak and volatile

News summary

South China's 500,000-ton ethylene glycol plant restartedputtputtbingo, Anhui's 300,000-ton plant load was reduced. Ethylene glycol spot prices fluctuated and weakenedputtputtbingo, the external trading price fell. EG2409 contract transaction volume fell, and polyester production and weak demand dragged down the market. Coal-based costs have risen, oil-based costs have stabilized, and inventories may become a new price indicator.

Newsletter text

[South China Glycol Plant Restart] A 500,000-ton Glycol Plant in South China is heating up and restarting as scheduled. The plant was suspended three months ago due to maintenance needs.

[Anhui syngas plant production reduction] A syngas to ethylene glycol plant in Anhui has an annual production capacity of 300,000 tons, and has recently reduced the operating load to 40% to 50%. This is expected to continue for a long time. Previously, the plant is at full capacity production.

[Ethylene glycol market dynamics update] The ethylene glycol spot market on May 21 showed that prices showed a volatile downward trend and the market's willingness to purchase was weak. During night trading, the price of ethylene glycol remained weak and consolidated. The spot market transactions mainly focused on the discount of the 09 contract of around 35 yuan/ton. The basis weakened simultaneously in the afternoon. The spot transaction price in the late session was close to the discount of 40 yuan/ton for the 09 contract. Some contract vendors began to replenish stocks moderately.

[Volatility of ethylene glycol external price] In the US dollar market, ethylene glycol external price also fluctuated downward. The recent transaction price of ship and cargo was around US$526/ton in the morning, and dropped to the range of US$522 -523/ton in the afternoon. Some traders participated in the purchase.

[Trading Strategy Analysis] On the previous trading day, the EG2409 contract closed at 4526 yuan/ton, down 0.0% from the previous day.puttputtbingo.64%, and the trading volume on the day reached 260,000 lots. Despite market rumors that the polyester industry may further reduce production and the production and sales situation is unclear, prices continued to fall before the close. On May 21, the production and sales rates of polyester filament, staple fiber and polyester chips were 45puttputtbingo.48%, 29.74%, and 53.36%, preferential activities in polyester factories have decreased, and the downstream market is not willing to replenish stocks, mainly because the previous replenishment needs have been completed.

[Fundamentals and Price Outlook] After the current ethylene glycol price reaches 4500 yuan, the momentum for continued upward has weakened. This is mainly due to weakness on the demand side and a potential recovery on the supply side. As coal prices rise, the cost of coal-based ethylene glycol also increases; while the cost of oil-based ethylene glycol is relatively small due to the lower price of ethylene. In view of the concentrated arrival of goods in Zhangjiagang in the latter part of the year, inventory levels may become a key factor affecting price changes. Overall, the ethylene glycol market is expected to remain volatile.