It will take time for the ethylene industry to get out of the trough

　　In the first ten days of June, the most promising light hydrocarbon cracking route to ethylene lost a loss of more than 320 yuan/ton
.
So far, none of the three routes of ethylene have been spared, and all have fallen into a loss situation
.
What is the future trend of the ethylene industry?

　　From the author's point of view, it will take time for the ethylene industry to get out of the trough, mainly for three reasons
.

　　First, the high cost pressure is difficult to reduce
.
After the international crude oil price broke through the $100/barrel mark at the end of February, it has only been below $100/barrel for 3 working days, and is currently running above $110/barrel
.
International crude oil prices remain high, raising the cost of naphtha to olefins and light hydrocarbons to ethylene, making it a loss
.
As of June 15, the average profit loss of naphtha crackers in the first half of the year was US$139/ton, a year-on-year decrease of 132.
38%; the profit loss of methanol-to-olefins (MTO) units was 551 yuan/ton, a year-on-year decrease of 480%
.

　　In the future, affected by factors such as the conflict between Russia and Ukraine, rising fuel costs, and with the rebound of Asian demand and the arrival of the peak summer travel season in the West, it is expected that the crude oil market will still run at a high level, and the cost of ethylene will remain high
.

　　Second, the supply is sufficient and the competition is fierce
.
At present, the operating rate of the light hydrocarbon-to-ethylene industry has reached more than 90%, and the other two process routes are also around 80%
.
In addition, since the beginning of the year, Zhenhai Refinery's 2# cracking unit and Tianjin Bohua unit have been put into operation, adding a total of 1.
5 million tons/year of ethylene production capacity
.
In addition, the concentration of imported ethylene to Hong Kong and the suppression of low price advantages have led to a more relaxed domestic spot supply of ethylene
.

　　The third is sluggish demand
.
Due to the epidemic prevention and control and the slowdown in economic growth, the terminal demand is sluggish, and the downstream of ethylene is basically in a state of long-term losses.
Reducing the negative price and insuring the price has become the preferred choice for production enterprises, and the capacity utilization rate has shown a downward trend
.
Among them, the most obvious decline was in the ethylene glycol and EPDM rubber industries, followed by the styrene and polyvinyl chloride industries
.

　　From the perspective of the ethylene glycol industry, the epidemic situation has eased in various places, but the recovery of terminal orders is not good, and the start-up load of polyester enterprises is very slow
.
The polyester industry chain did not perform well in the seasonal peak season, which restricted the rise of the ethylene glycol market price, and the profit and loss of the industry remained at 800-1000 yuan for a long time
.
The EPDM rubber industry is also subject to the poor performance of the terminal and the decline in capacity utilization
.

　　Looking at the market outlook, the demand for infrastructure, automobile manufacturing and other terminal industries may show a slow upward trend, but the polyethylene industry in the main downstream consumer fields has entered a low season of demand, and the overall demand is still weak
.
The industry's lack of confidence in the market outlook makes it difficult to bring support to the higher ethylene market
.

　　On the whole, the current cost of naphtha crackers is expanding, and the plants in Japan and South Korea are operating at reduced loads.
The spot supply in the field has declined, but the demand side also remains weak.
It is expected that the ethylene market will remain sluggish, and the loss situation will hardly improve.

.