Delayed production of new capacity

Still remembering the end of 2014, many ethylene glycol manufacturers released production plans one after another, which was particularly concentrated in the second quarter. However, with the passage of time, the new faces that were said to be good at the beginning of the second quarter have been delayed until the end of the quarter. With delays in the production of new production capacity, there is an increasing trend in the shutdown of the original installations. Parking is also common. Tight supply has become the main theme of the recent penetration of the ethylene glycol market fundamentals. Whether or not the fundamentals of the upcoming May can be reversed becomes an anxiety for the industry.

The new production capacity in the second quarter was more, but basically concentrated in June, and the new supply in the market in May was around 25,000 tons. Compared with the current level of port stocks near the port of 550,000 tons, the market supply of ethylene glycol in the near future is still weak.

Most of the overhaul devices will be restarted in May. However, the restart is basically concentrated in the latter part of the month. In addition, the restart time of some new devices may also be postponed. Therefore, the total market growth in May is expected to be limited. The increase in market supply is largely reflected in June.

The overall downstream polyester demand has recently been stable. According to the current start-up load of 78.68% for polyester (capacity base is 46.335 million tons), the monthly demand for ethylene glycol in the polyester sector is about 1.05 million tons. The recent ethylene glycol market stocks remained at around 550,000 tons and the import equivalents remained at around 680-700,000 tons. Therefore, in the short term, the ethylene glycol market still has a gap of about 100,000 tons.

In addition, the recent unscheduled shutdowns of foreign plant installations and the later shutdowns routinely conducted in South Asia will also cause some pressure on the supply of contracted downstream polyester plants. It is reported that there have been delays in the arrival of factory contract cargoes. Therefore, the overall outlook for the ethylene market in May was still preferred.

Taken together, although the recent ethylene glycol market was affected by the completion of the month-end delivery and the loss of more than one profit, the market conditions declined, but the analysis shows that the support of the ethylene glycol market fundamentals still exists, although there is room for growth in early May inventory. However, the margin will not be too large, and the market as a whole will still be a process of destocking, and the gap will remain. However, the start-up load in the polyester factory and terminal weaving sector in the month of May is expected to remain stable, and the market just needs no worry. Therefore, in the medium and long term, the fundamental performance of the ethylene glycol market is still steady, and the recent decline in production and sales is basically a normal contraction after the previous production and sales volume.