Author: Wang Yilu, East China Sea Futures
1. Supply returns to superimpose raw material pressure, and is expected to maintain weak volatility in June.
Ethylene glycol in the mid-May market once again played its role of countertrend water storage, homeopathy with the rising role, 09 price center slightly upward. Except for this round of small prices.779pubcomDriven by plate resonance, the clear production capacity of ethylene glycol itself also provides support. Recently, the refined oil products are relatively weak and the profits in the export market are on the low side, resulting in the overall start-up of domestic refineries at a low level in the near future. Secondly, the clearance of ethylene glycol production capacity is still going on, and the superimposed profits lead to a decline in start-up and a decrease in hidden inventory.
First of all, although the export quota of the second batch of oil products was issued in the early period of 9 million tons, which is twice as high as that of the second batch of oil products in the same period last year, due to the overall low profits in the Asian export market, so far, the export volume of refined oil this year is much lower than that of previous years, and the export of gasoline in April is a record low, so in this case, refinery operation is relatively limited, or the conversion tail rate is increased. However, considering that the overall profits of the chemical industry are relatively general, the ethylene-naphtha oil price difference is also low in the same period over the years, and the conversion space of the conversion tail is also relatively limited, which makes the refinery start-up space to be suppressed. recently, refinery and state-owned refinery start-up have continued to be at a neutral low level, and the supply of chemical raw materials is relatively limited. Under the premise of weak overseas consumption in the short term, it may be difficult to have a significant improvement, and to some extent, it will also become a relatively smaller support for the chemical sector to fall with crude oil in the later period.
Recently, in the ethylene glycol plant itself, Zhenhai and Fuling have all postponed the restart. Zhejiang Sinopec also postponed the restart time originally scheduled for May due to problems in the cracking unit, while the second line of the satellite that was overhauled was already reducing its load, and the start-up of the overall oil plant was lowered in May. In the coal-making plant, Yuneng and Zhongkun resumed production in the near future, and the overhaul of Tongliao and Yongcheng basically offset the influence of Qianxi coalification and Shaanxi coal restart, while the conversion to production after the technical transformation of 600000 tons in Sanning, Hubei Province partly limited the regression influence of the coal-making plant in the later stage. Supply changes in late May and June are still planned for several large installations. Under the influence of overhaul in May, it is expected that a small removal of the warehouse can still be achieved, but after the return of the large plant in June, the supply will pick up somewhat, the production capacity of the unit with a high probability of regression in June is about 2.5 million tons, and the corresponding polyester start-up demand is still high. if downstream start-up remains low, press 88779pubcom.5% polyester start estimates that the elimination of ethylene glycol inventory may stagnate in June, and even tend to accumulate again if downstream production is reduced.
In addition, the recent purchasing demand downstream is still rigid. Judging from the recent shipments of ethylene glycol in Zhangjiagang, ethylene glycol shipments are still full, but unlike in the previous period, the recent speculative raw material procurement demand is obviously low at low prices, which is also consistent with the recent downstream profit situation. In the case of the lack of terminal orders, the downstream profit situation as a whole is at a low level. As a result, even though the factory's raw material inventory level is already low and upstream prices are falling for promotion, manufacturers are still reluctant to overpurchase. In addition, in the case of low profits, there is still an incentive to reduce production downstream, which will put renewed pressure on the demand for ethylene glycol in June.
However, so far, although there are rumors that the downstream leading manufacturers will reduce production by 5%, there is actually no news to confirm the consensus on production reduction. Due to the relative dispersion of production capacity, as in the past few years, downstream production reduction often requires several rounds of negotiations, and the final effect of production reduction also needs to be observed, which leads to although short-term polyester start-up is still on the high side. however, the short-term removal of downstream finished product inventory is more difficult and remains high, restricting the overall price of the polyester chain.
We still do not make an optimistic forecast of oil prices in the short term. As the growth rate of overseas service consumption continues to decline, crude oil still faces pullback pressure in June, and there is a high probability that the center of gravity of the energy plate will shift downwards. Therefore, there is still a little room for correction of ethylene glycol under supply pressure and raw material pressure in June, and it will remain volatile in the later stage.
2. The long-term multi-allocation value continues to increase, and the 01 and 05 drivers are expected to be enhanced in the later stage.
At the beginning of the year, when the price center of ethylene glycol rose, the industry generally expected that there would be a trend of ethylene glycol this year, but the price prospect of ethylene glycol became gloomy again when weak orders led to a decline in the price center of ethylene glycol in the lower reaches of the second quarter. But in fact, if we look at the experience of the past few years, the cycle of the polyester raw material industry is basically 3-4 years, and ethylene glycol still has a high matching value in 24 years or early 25 years, especially when the petrochemical industry may be under greater pressure in the middle of the year. May give a relatively good entry price.
In terms of capacity growth and elimination, according to this year's data, ethylene glycol has less new production capacity. Judging from the capacity changes in the past few years, 24 years is also the smallest year of increment. This year, in addition to China-Kunming Phase I, which has already started, Ningxia Baoli and Zhongkun Phase I have a higher probability of operation, totaling 800000 tons. In addition, the 23-year phase-out / long-term shutdown capacity is about 1 million tons, coal production capacity accounts for more than half, in the case of short-term profits are still low, it is difficult to see the return of these capacity.
As for the capacity expansion in the lower reaches of 24 years, due to the substantial reduction in filament capacity expansion, it is not compared with the 9.2 million tons in 23 years, and the annual capacity expansion is expected to be about 7.5 million tons, and more production capacity is concentrated in the second half of the year. However, considering the current sharp decline in bottle chip profits, the new production capacity downstream for the whole year may shrink to less than 700 or even 6 million tons.
To make the simplest calculation, even if it is estimated in a worse case, the downstream production capacity for the whole year is only 6 million tons, and the demand for ethylene glycol is increased by 2 million tons, which is 1 million tons more than the 1 million tons of production capacity that is likely to be added this year.
Even taking into account the possible return of nearly 1 million tons of ethylene glycol phase-out / long-term shutdown unit, as well as the possible start-up, 24 years can be said to be basically to the end of capacity clearance, as long as downstream demand can recover to a certain extent in the later stage, so that ethylene glycol inventory has been eliminated for a long time, then for 01 or 05 contracts, the probability of trend market will be greatly increased.
Of course, our estimates here do not fully take into account the import variables and the start-up of the stock. Experience shows that the import variables and the return of the stock of low-load/shut-down devices may still become the slow-release point of the later trend rhythm. However, prices often have to come first, and these variables usually lag behind changes in domestic prices.
At present, it seems that the current factory inventory has reached a low level, from 200,000 tons in the same period last year, and so far only 33,000 tons. However, explicit inventories are still high, and port inventories are still above 750,000 tons. However, downstream demand has been poor recently, and de-conversion has basically stalled. However, the low factory inventory has actually achieved the conversion of inventory. If the port's explicit inventory shows signs of being reduced to 500,000 tons, the price drive will manifest itself.
The possible time point lies in the peak season of the third quarter, and it is necessary to verify whether downstream orders have returned or there has been a significant increase in exports. If demand gradually returns to normal, the current low factory inventories will actually have a certain driving force. In addition, more funds are also continuing to seek low-valuation varieties for allocation this year. Ethylene glycol has served as a reservoir in previous rounds of weak markets. Short-term 09 contracts may continue to be affected by weak raw materials and return of supply, but for 01 or 05 contracts, it is not ruled out that trend prices will continue to appear in the second half of this year.
