The profit of oil-based ethylene glycol has a maximum loss of 2,000 yuan / ton

Since the beginning of this year, with the continuous rise of oil prices on the cost side, the profit of ethylene glycol has continued to be compressed.
When the profit of oil-based ethylene glycol was at its worst, it was once compressed to a historical low of -2,000 yuan/ton
.
Compared with PTA and other downstream polyester products, ethylene glycol, which continues to record low profits, can be regarded as the worst variety in the polyester industry chain
.

Why did the profits of ethylene glycol fall sharply?

Ethylene glycol has become the weakest variety in the industry chain since the Spring Festival, and its price relative to PTA has been weakening.
USD/ton or more
.

An important reason for the heavy losses of ethylene glycol at this stage is that the commissioning of the integrated refinery is constantly impacting the bottom line of costs
.
Several sets of coal chemical plants put into operation at the end of last year successively completed the commissioning and entered the mass production stage at the beginning of this year
.

According to reports, the situation of strong oil and weak coal has made the coal chemical plant start stable, and the import volume from January to February is also relatively high.
Since March, the domestic epidemic has superimposed the sharp fluctuations in the price of raw materials, the consumer market is obviously weak, and the logistics has been greatly affected.
, Although the load of some ethylene process plants has decreased, the overall EG inventory has not fallen significantly, and the ethylene glycol market is difficult to change
.

About 1/3 of domestic ethylene glycol plants are coal chemical plants, and the other 2/3 are ethylene plants
.
As coal prices lagged behind oil prices, and ethylene glycol prices followed oil prices, the production of coal chemical plants remained relatively stable after the Spring Festival
.

Domestic ethylene process plants are mostly supporting capacity of refineries.
Generally, in addition to supporting EO/EG downstream of a set of ethylene cracking plants, PE, styrene and PVC can also be equipped with products such as PE, styrene and PVC.
The supporting capacity of some plants can be converted between products.
For example, in Zhejiang Petrochemical's 1.
55 million ton EG unit has recently dropped to 80% of its operation, mainly because it has newly opened a set of PE, and some ethylene raw materials have been converted to PE with relatively good profits, but most of the ethylene cracking units are matched with downstream chemical production capacity.
, the production space is limited
.

From the perspective of supply and demand, ethylene glycol is weaker than other polyester varieties, especially PTA
.
It can be seen from the price difference between PTA and ethylene glycol that at the beginning of December 2021, the price difference between the two is still around -500 yuan/ton, and it will rise to a flat level from the end of December 2021, and the price difference will gradually widen to 400 yuan in February 2022.
-700 yuan / ton, the price difference continued to rise in March, once close to 1,000 yuan / ton, and entered April, the highest price difference was around 1,300 yuan / ton
.

The main logic of the current ethylene glycol price trend is still the contradiction between the rise of the cost-side price center and the sharp weakening of terminal demand, and the profits of the intermediate links of the industrial chain have been greatly compressed
.
The sharp fluctuations in crude oil prices will still dominate the short-term trend of ethylene glycol prices in the near future.
The supply and demand of crude oil are still tight, while crude oil inventories are at a low level, and the situation in Russia and Ukraine is still in the game.
Absolute prices will fluctuate with raw materials
.

Affected by profit loss and weakening of terminals, the three major polyester factories announced plans to reduce production by 25% at the end of March.
However, due to the impact of the epidemic, the operating rate of terminal weaving has dropped sharply, and polyester production has declined simultaneously
.

From a medium and long-term perspective, the progress of new production capacity will be the key to affecting the ethylene glycol pattern
.
"If there are not too many variables in the commissioning of subsequent plants, especially if several large plants can be put into production as planned, the medium and long-term supply and demand pattern of ethylene glycol will not be optimistic
.
"

It is worth noting that in the context of excess capacity, it is difficult for ethylene glycol to obtain better processing profits
.

At present, Zhejiang Petrochemical's 1.
55 million-ton unit has been reduced to 80% of its operation, mainly due to the conversion of ethylene to PE; Sanjiang's 150,000-ton unit has been shut down, and 50% of the Far East United unit is running, and there are plans to stop in the later stage; 70% to 80% of the energy is in operation.
Two sets of CNOOC and Shell plants totaling 800,000 tons.
Among them, the second phase was stopped in the early stage, and it is planned to restart this week
.