At present, the ethylene glycol industry is in a state of loss, the operating rate remains low, the epidemic continues to restrain consumption, new installations are coming into production, the port inventory remains high, and the price decline is difficult to reverse.
The decline of international crude oil price led to the lower price of ethylene glycol. After the Spring Festival this year, the profit of ethylene glycol is poor as a whole, especially the cash flow pressure of coal chemical plant is large. From April, the coal to ethylene glycol unit began to decline significantly, and maintained a long-term low load level of below 40% from mid-late April to early June. The domestic comprehensive ethylene glycol operation rate synchronously went down to below 60%. Despite a sharp contraction in domestic output, port inventories have continued to climb. According to statistics, the port inventory in East China has continuously climbed to more than 1.4 million tons from 450,000 tons before the Spring Festival, and the current port inventory level is approaching the highest level in April 2019.
After May 2019, the utilization rate of ethylene glycol dropped to below 70% and remained low until the end of October, with the lowest at around 57%. Port stocks continued to decline during this period, and had dropped to the ideal level below 600,000 tons at the end of October. This is mainly due to poor profits, new investment equipment delay, downstream consumption performance better than expected. However, at the beginning of this year, after the production of 400,000 tons of Yankuang, 1.8 million tons of Hengli Petrochemical and 750,000 tons of Zhejiang Petrochemical, the supply capacity of ethylene glycol in China has increased significantly, and the import volume is also higher than that of the same period in previous years. However, downstream consumption has shrunk significantly due to the impact of the epidemic, and low start has failed to achieve destocking.
With the crude oil price rebound, ethylene glycol price center of gravity rise, coal chemical plant restart, ethylene glycol operation rate rose. At present, with the upstream naphtha, ethylene and other raw materials prices rebounded strongly, oil glycol processing loss, the whole industry into a deficit. In the future, the maintenance and restart of ethylene glycol unit will coexist, and the operation or continue to be at a low level, but the downstream consumption improvement space is limited, and the high port inventory is difficult to be digested.
Year plan for production of ethylene glycol at home and abroad more than a total of 8 million tons at present except hengli petrochemical and zhejiang petrochemical production on time, sinochem quanzhou by the second quarter of 500000 tons of plant start-up time delayed to 10 - November, CST petrochemical by the second quarter of 500000 tons of new plant start-up time delay to 7 - August, and three sets of oil head device abroad, Malaysia after the first quarter of 750000 tons of plant put into production for parking, restart time in the fourth quarter, Formosa plastics and JUPC3 two sets of plant start-up time delayed until the fourth quarter and next year respectively. Several coal chemical plants planned to be put into production have not been put into production except the 400,000 ton plant in Yankuang, Inner Mongolia, which was put into production in February. According to the current information, we will pay close attention to the construction and production trends of 600,000-ton units in Sanning, Hubei and 600,000-ton units in Tianye, Xinjiang. Overall, the second half of the domestic two sets of a total of 1 million tons of ethylene oxidation plant production is more likely, plus two sets of larger coal chemical plant, glycol new production pressure is greater.
From the perspective of consumption, at present, the downstream polyester construction has reached a high level of 91%, but the raw materials and product inventory of the terminal weaving enterprises are at a high level, and the ability to continue stocking is limited. It is expected that polyester construction will decline with the rise of polyester inventory, with limited upward consumption space and great downward pressure. Therefore, the new production capacity of ethylene glycol is difficult to be digested by the downstream, and the storage situation will continue.
The newly put into production unit of ethylene glycol contributed a large output in the first half of the year, and imported goods poured in continuously. Although the overall operating load of ethylene glycol in China was low, it failed to realize destocking. In the aftermarket, the new unit in China is under great pressure to put into production, which may be difficult to be digested downstream. The situation of glycol storage will continue, and the price will be under long-term pressure.
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