Multiple negatives suppress ethylene glycol prices higher

The cumulative total retail sales of domestic apparel, footwear, and knitting textiles are still at a low level year-on-year, while the cumulative retail sales of online clothing products are also at a low level year-on-year and the recovery is slowing down.

On the whole, the cumulative total retail sales of domestic apparel, footwear, knitwear and textiles are still at a low level year-on-year, while the cumulative retail sales of online clothing products are also at a low level year-on-year and slowing down.
Although textile consumption recovered well in October, we expect that terminal consumption from November to December may continue to be weak, which will be difficult to support polyester end demand and be negative for ethylene glycol prices.

PTA weakness is clearer

PTA and ethylene glycol, as complementary products for polyester production, have a highly consistent price performance compared to other energy and chemical products.
From the perspective of supply and demand fundamentals, PTA companies have good profits and PTA imports have continued to rise since the beginning of this year.
Therefore, we expect that the supply will continue to increase from November to December.
In terms of inventory, as of the week of October 30, PTA's domestic weekly inventory was 3.
945 million tons, a decrease of 17,000 tons from the previous month.
However, the overall inventory level is still in the high quintile of 97.
39% since 2015.
With the gradual decline in market demand in November, it is expected that the overall inventory level of PTA will continue to be at a high level and will be difficult to eliminate.
The loose supply pattern will suppress the upward trend of prices for a long time.
In the absence of a clear positive stimulus, the price of PTA will run weakly, and ethylene glycol will likely follow.

　　Previously, crude oil price increases and concentrated overhauls made PTA and ethylene glycol enter a short period of destocking, but the price increase of PTA futures during the month was significantly lower than that of ethylene glycol driven by the same good.
The spread between the PTA index and the ethylene glycol index Continue to expand, ethylene glycol futures prices may be overvalued.

　　Judging from our statistics on the rise and fall of PTA and ethylene glycol since the beginning of 2020, in the 200 trading days as of October 30, the rise and fall of PTA was weaker than that of ethylene glycol, which accounted for the majority.
Among them, PTA fell while ethylene glycol The increase accounted for 13% of the total.
The increase of PTA was lower than that of ethylene glycol, which accounted for 20% of the total.
The decrease of PTA was higher than that of ethylene glycol, which accounted for 21% of the total.
This shows that under the weak PTA pattern, the complementary product ethylene glycol is also likely to be weak, and the futures price is more likely to fall.

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