Introduction: “If it falls for a long time, it will rise. If it rises for a long time, it will rise.” Ethylene glycol, which has been rising for nearly 20 days, finally failed under the heavy blow of crude oil on September 8, and ethylene glycol stopped rising. fell, thus opening its weak downward channel. It is reported that ethylene glycol has fallen significantly in the past 10 trading days. As of September 18, the internal price of ethylene glycol was concentrated at 7,365 yuan/ton, a decrease of 455 yuan/ton from the price on the 8th, a decrease of 5.8%.
1. The overall correction of commodities has put pressure on ethylene glycol from the outside world
In fact, the sharp drop in crude oil on September 8 had a greater impact on the mentality of ethylene glycol than the cost. Under the pressure of crude oil, the bullish power in the ethylene glycol market has been greatly reduced, pouring cold water on the ethylene glycol market that has continued to be hot. However, the impact of this round of ethylene glycol’s decline in crude oil is limited, because except for the decline in crude oil on the 8th, crude oil closed up in the following trading days, and the price center of gravity increased more obviously. The impact of crude oil is limited, but the recent overall correction in the commodity market has clearly exerted pressure on ethylene glycol. It is reported that bulk commodities such as cotton, PTA, and methanol all experienced corrections to varying degrees in early September. The overall performance of funds was weak, and ethylene glycol could only despair.
2. Downstream demand is sluggish, and ethylene glycol’s upward momentum is insufficient
In the early stage, polyester manufacturers’ production and sales were booming, and inventories continued to decline. The rebound in downstream buying momentum led to an increase in the entire polyester market. It can be said that the polyester market was booming across the board during that period, and it felt like the “peak season” had arrived early. However, as the raw material market conditions have weakened, the enthusiasm for frantic stocking downstream has gradually faded. It is reported that in the past week, it has been difficult for polyester manufacturers to make major breakthroughs in production and sales. Weaving manufacturers have many raw materials on hand and are buying up rather than buying down. Although the current price of polyester filament remains unchanged, there are few bullish views in the downstream. It’s a wait-and-see mentality. Poor downstream trading has had a negative impact on the upstream raw material market, and the ethylene glycol market has been restrained.
The correction of ethylene glycol has been going on for several days now. Is ethylene glycol going to keep falling like this?
The author believes that there is still no condition for a deep decline in ethylene glycol. From the current point of view, the supply and demand side of ethylene glycol is still good, and good fundamentals provide strong support for ethylene glycol. It is reported that the total inventory of ethylene glycol in the main port of East China is about 506,000 tons, of which a mainstream warehouse in Zhangjiagang ships an average of about 9,500-10,000 tons per day; the average daily shipments in Taicang and Changshu are about 4,000-4,500 tons. As polyester manufacturers are still operating at a high level and have a large demand for raw materials, ethylene glycol inventories are mostly maintained at a more reasonable level. Taking the East China port inventory as an example, the inventory has been around 500,000-600,000 tons since August. During the period, inventory pressure is not great, and demand support remains strong in the later period.
Although the recent production and sales performance of polyester manufacturers has been average, the end-use weaving market is still remarkable. It is reported that the Shengze Chemical Fiber Index of the Ministry of Commerce can be seen that the overall trading atmosphere of the fabric market in the Shengze area has improved recently, with local transaction volumes rising slightly, among which autumn and winter clothing fabrics have better transactions. Although printing, dyeing and weaving are still affected by environmental protection in some areas, the overall market is still advancing steadily. Weaving manufacturers have sufficient orders on hand, especially the low inventory of conventional products, which further drives the enthusiasm of manufacturers for production. Currently, Shengze and surrounding areas have started operations It has risen to 70-80%.
September is already halfway through. Although the early frantic rush for goods and stocking up in the terminal market has passed, the current tight supply and demand pattern of some products on the weaving end still exists. At the same time, autumn and winter orders have begun to be released. With the support of the rebound in demand, the author believes that A sharp decline in ethylene glycol is unlikely.
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