Coal Is Down, And It Is Difficult To Solve The Problem Of High Inventory Of Ethylene Glycol.
The 3-4 month is in the traditional peak season of downstream polyester, while domestic glycol has not gone out of the good market. This trend is relatively rare in previous years, and high inventory to the market is a problem that can not be ignored.
In the next month, the domestic coal glycol enterprises will usher in the spring overhaul period. Can it alleviate the current high inventory pressure?
Domestic glycol production increased significantly
Comparison of production of ethylene glycol in China in 2016-2019 years
Source: lung Chung
Since August of 2018, with the commissioning of new coal enterprises such as salt and red Quartet and Qian Xi coal, the monthly output of ethylene glycol has successfully exceeded 600 thousand tons in China.
In October, Shell and Hua Lu Heng Sheng went into operation smoothly, and the domestic output reached about 680 thousand tons.
Ethylene glycol resources in China have squeezed the market share of imported resources with their geographical advantages and price advantages, which has laid a hidden danger for the accumulation of port stocks.
Operation stability of polyester enterprises
Comparison of polyester production rate in 2016-2019 years
Source: lung Chung
Since entering the traditional peak season, the performance of polyester enterprises has been performing well.
Compared with previous years, it is not as high as that of 2018, but is still at a high level compared to 2016 and 2017.
Moreover, the total domestic production capacity of polyester has reached 55 million 850 thousand tons, and the start-up load has increased to 90%. The monthly demand for ethylene glycol has reached about 1 million 400 thousand tons.
Large area maintenance of coal glycol Enterprises
Company | Capacity (10000 tons) | Maintenance plan |
Yang coal stabilization | Twenty | Three Parking inspection on 25 May, 15-20 days for overhaul. |
Yang coal Shouyang | Twenty-two | Four Planned maintenance for 20 days in late June is not yet decided. |
Yang coal Shenzhou | Twenty | Four 20 days overhaul at the beginning of the month |
Yongjin Puyang | Twenty | Four Car maintenance is scheduled for 2 months, and is expected to be overhauled for 1 months. |
Yongjin Luoyang | Twenty | The device is still under repair. |
Yi Gao | Twelve | Four The month begins to overhaul for one month. |
Xinjiang Tianye | Twenty-five | Three On January 25, it began to be seized for one month. |
Total | One hundred and thirty-nine |
Source: lung Chung
As can be seen from the above chart, the overhaul enterprises in April were mostly coal based ethylene glycol enterprises, and the total capacity of the overhaul enterprises reached 1 million 390 thousand tons, with a loss of about 110 thousand tons.
On the other hand, in the current round of maintenance, in addition to Yongjin Puyang's earlier scheduled maintenance plan in May, the rest of the coal enterprises are overhauled within the plan.
Market overhaul of coal to ethylene glycol has been expected, and has little impact on the market.
Continuous accumulation of main port inventory
Comparison of ethylene glycol inventory in East China's main port in 2018-2019 years
Source: lung Chung
Although the demand side of polyester is stable, the operation of domestic glycol enterprises is stable, and domestic enterprises adopt point to point delivery mode and have certain price advantages, especially coal based ethylene glycol enterprises.
In addition, East China is the world's major consumption of ethylene glycol, and there is no additional demand point abroad, so a large number of ethylene glycol resources are concentrated in the East China port area.
As of April 4th, the MEG port in East China's main port area has a stock of about 1 million 235 thousand tons, an increase of 23 thousand tons compared with last Thursday and a record high again.
There are still more pre arrival ports in the near future.
Port area | Number | Company |
Zhangjiagang | Eleven | Ten thousand tons |
Taicang | Three point three | Ten thousand tons |
Jiangyin | One | Ten thousand tons |
Shanghai | Three point two | Ten thousand tons |
Ningbo | Eight point seven | Ten thousand tons |
Total | Twenty-seven point two | Ten thousand tons |
Source: lung Chung
From April 4th to April 10th, we can see that the volume of incoming port is still larger.
Among them, compared to the daily average of 7000 tons of shipments, Zhangjiagang 110 thousand tons of cargo still more.
And there will be a certain reduction in Taicang next week.
Next week, there will be a demand for storage in Ningbo.
So in the short term, the situation of East China's main port will continue.
On the whole, the loss of coal to ethylene glycol is up to 110 thousand tons.
Although the polyester terminal has a high rate of opening, but the factory is long enough, and the market is not clear, the purchasing enthusiasm is not good, and the procurement strategy is based on demand.
The loss of 110 thousand tons is negligible for the 1 million 230 thousand ton inventory.
There is no substantial improvement in the contradiction between supply and demand of ethylene glycol. Wharf high inventory will become normal.
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