The price of ethylene glycol rose slightly in September after the decline

According to the data from the business community, the average price of oil to ethylene glycol P value was 4350 yuan/ton on September 30, and the average market price at the beginning of the month was 4125 yuan/ton, up 5.45%.

According to the external data of ethylene glycol, as of September 29, the spot CIF price of ethylene glycol in China was 497-499 dollars/ton, up 8 dollars/ton from 489-491 dollars/ton at the beginning of the month; The spot CIF price of ethylene glycol in Southeast Asia rose by 30 dollars/ton to 524-526 dollars/ton from 494-496 dollars/ton at the beginning of the month.

Overview of ethylene glycol fundamentals

From the supply side data, at present, the overall domestic ethylene glycol operation maintains a relatively low startup rate, and the capacity utilization rate is about 50%. However, some devices are planned to restart in the near future, and the domestic ethylene glycol supply is expected to recover at a low level.

On the demand side, the terminal orders were weak in the first half of the year, and the weaving operating rate was always below 85%. As the year gradually entered the peak season, the demand is expected to be repaired. The winter orders are expected to increase. At present, the gray fabric inventory is at a medium to high position. The polyester finished product inventory is expected to decline slightly in the short term. The polyester profit is low, and the bottle piece is better than the staple fiber than the filament.

The inventory data shows that the ethylene glycol inventory of the main port in East China is about 800000 tons, and it is estimated that the arrival volume of the main port in East China during the National Day will reach 240000 tons.

Future market forecast

In the early stage, the low price of ethylene glycol and the shrinking supply brought about a slight improvement in the price, but the improvement in supply and demand may be difficult to sustain. Although ethylene glycol is expected to go to the warehouse in the near future, the subsequent coal production may return rapidly in the stage when the raw material ethylene is surplus and the refining supporting ethylene glycol is still in production. In addition, the downstream demand is less than expected, and MEG may operate weakly in the short term.

According to the bulk list data of business cooperatives, the average price of acrylic acid in East China was 8666.67 yuan/ton as of September 29, up 14.54% compared with September 1, down 37.80% year on year in a three-month cycle, and down 52.81% compared with the same period last year.

In September, the overall trend of acrylic acid market rose, and the prices of some enterprises decreased at the end of the month. In the first half of the year, the market price of raw propylene gradually rose, the cost support gradually rose, some enterprises’ equipment maintenance reduced the supply, the downstream stock was orderly before the Mid Autumn Festival, the market price was strong, the cost support was firm after the festival, the industry started to decline, and the downstream operating rate was comprehensively improved, which supported the steady rise of acrylic acid price. In the late ten days, the market was stable and weak. The raw propylene was stable first and then rose. The cost pressure remained, but the demand was flat, the buying was average, and the early inventory was more digested. Near the end of the month, the downstream stock was gradually approaching the end, and the manufacturer’s quotation was stable and slightly changed.

On September 28, the benchmark price of upstream propylene in the business community was 7610.60 yuan/ton, up 7.18% from September 1 (7100.60 yuan/ton).

According to the acrylic analysts of the business community, the cost support is still there, the holiday is approaching, the downstream customers have basically completed their stock preparation, and the market trading atmosphere is stable. It is expected that the acrylic market will be mainly stable in the short term, and more attention should be paid to the changes in market news.

According to the monitoring data of the business community, as of September 28, 2022, the average ex factory price of domestic industrial propylene glycol was 9733 yuan/ton, and on September 1 (the reference price of propylene glycol was 9250 yuan/ton), the price increased by 483 yuan/ton, or 4.50%.

It can be seen from the data monitoring chart of the business community that since September (9.1-9.28), the domestic propylene glycol market has been rising as a whole. In the first ten days of September, supported by the high cost of raw materials and the low inventory of propylene glycol in the field, the domestic propylene glycol market saw a steady rise at the beginning of the month, and the price rose by nearly 6% to 400-600 yuan/ton within five days. Subsequently, the market continued to consolidate at a high level.

After the Mid Autumn Festival, the center of gravity of propylene glycol market continued to move towards the high-end. With the rising cost and the downstream demand side being boosted, the pressure on propylene glycol supply was low, and the market ushered in a broad rise. As of September 15, the propylene glycol market price was near 9900-10300 yuan/ton, and the market rose by more than 9% in the first ten days.

At the end of September, on the 16th and 17th, the propylene glycol market price rose again as a whole, with an upward range of about 200 yuan/ton, and then the market remained stable at a high level. Since the 21st, with the decline of raw material costs, propylene glycol cost side support has become loose. In addition, after the high price on the market, the downstream wait-and-see sentiment has increased. With the market trading and investment on the market becoming weak, and both supply and demand becoming weak, propylene glycol market prices have started to fall back from a high level. As of September 28, the domestic propylene glycol market price has referred to around 9500-9800 yuan/ton, with a decline of 4.29% in the last ten days. At present, the trading atmosphere of propylene glycol market is light, and the overall performance of new orders is average.

On the upstream side, the propylene oxide market rose slightly in September. In the first half of the month, the price of raw propylene rose, and the cost support was gradually strengthened. Before the festival, the on-site devices were mainly stable, the supply was tight, the factory shipments were smooth, the market was not pressured, and the market returned after the festival. The market continued to be tight, the demand side was flat, the downstream mentality was different, and the focus was on watching carefully. On the 15th, the mainstream quotation of the propylene oxide market in Shandong was around 10500-10600 yuan/ton. In the second half of the month, the cost support remained, some units recovered, and the supply side increased, but the demand side was still flat. The downstream waited and waited, the inventory was slightly accumulated, and the price was lowered. In the last ten days, as the downstream polyether orders rebounded, factory shipments improved, the inventory pressure eased, and the market price rose slightly. After the deadlock operation, the mainstream quotation of the epoxy propane market in Shandong was around 9800-9900 yuan/ton on the 28th.

Future trend analysis

At present, the National Day holiday is coming, and the logistics and transportation have been stopped. After the completion of the propylene glycol staging, the current market new orders are not good. The propylene glycol data engineer of the business community thinks that during the pre holiday period, the domestic propylene glycol market is mostly weak, and the overall market fluctuation will not be too large. More attention should be paid to the basic changes in the supply and demand.

The price of ethylene oxide has risen slightly in the past 10 days, with an increase of 5.63%. At present, the mainstream ex factory price is 7400-7600 yuan/ton.

During the cycle, ethylene oxide continued its previous strong trend, but it has stagnated recently due to the following reasons:

1. The upstream ethylene price fell, and the cost support weakened.

According to the external data, the spot CIF middle price of ethylene in Southeast Asia decreased by 50 dollars/ton in the cycle, from 960 dollars/ton on the 16th to 910 dollars/ton on the 26th; The spot CIF middle price of ethylene in Northeast Asia decreased by 70 dollars/ton in the cycle, from 970 dollars/ton on the 16th to 900 dollars/ton on the 26th.

2. Both downstream supply and demand are weak;

In terms of downstream, the domestic polycarboxylic acid water reducer monomer market quotation is firm within the week. At present, the monomer factory has a low starting load of about 40%, the supply is not high, and the demand for construction in the terminal market is relatively weak, but it is in a situation of weak supply and demand. At present, the downstream has raised the price of ethylene oxide, which is acceptable, without significant negative feedback.

The business agency predicts that the price of ethylene oxide may fluctuate in the short term.

According to the monitoring data of the business community, as of September 26, the average price of propylene oxide enterprises was 10066.67 yuan/ton, which was 1.00% higher than that of last Tuesday (September 20), 11.85% higher than that of August 26, and 7.65% lower than that of last three months.

Recently (9.20-9.26), the market of propylene oxide has risen slightly. In the near future, the raw propylene market has been generally stable, with some support on the cost side. On the 20th, the downstream was mainly cautious. As the downstream polyether orders rebounded, factory shipments improved, inventory pressure eased, and the market quotation rose slightly. On the 26th, the market atmosphere was general, and the downstream just needed to follow up. The mainstream quotation of the propylene oxide market in Shandong was around 9800-9900 yuan/ton.

The upstream propylene, according to the data monitoring of the business community, on September 23, the reference price of propylene was 7430.60, up 4.65% compared with September 1 (7100.60).

The downstream propylene glycol, according to the monitoring data of the business community, the reference price of propylene glycol was 10000.00 on September 23, an increase of 8.11% compared with September 1 (9250.00).

The propylene oxide analysts of the business community believe that at present, the raw propylene has been consolidated and operated, the cost support still exists, the supply side inventory has been slightly accumulated, the pressure is not great, and the demand side is light. It is expected that in the short term, the propylene oxide market will be weak, and more attention should be paid to the market interest consumption guidelines.

This week (9.19-23), the domestic liquid ammonia market was operating steadily, and the market gradually entered a bottleneck period after the previous sharp rise. The supply was tight to loose, and Hebei, Shandong, Henan and other major production areas in the north stopped rising and stabilized. According to the monitoring of the business community, the rise and fall of liquid ammonia this week was 0.

Main domestic markets:

This week, the liquid ammonia market in Shandong was stable, and the market offer on Friday mostly maintained the price level on Monday. The overall quotation of Shandong manufacturers did not change much this week, most of them did not make any adjustment, and the market was generally strong. The manufacturer’s inventory pressure is average. At present, the supply and demand in this region are basically balanced, the downstream demand is slightly increased, the demand for agricultural fertilizer is increased, and the urea price is relatively strong, which still supports the ammonia price. As of Friday, the mainstream price in the region was 4200-4400 yuan/ton.

This week, the price of liquid ammonia in Hebei Province was stable. The dealers generally reported flat shipments. There was no significant change in the quotation of large factories from the beginning of the week to the weekend, but the price was still firm. The manufacturer’s inventory pressure is not great. Downstream procurement just needs to be maintained, and agricultural demand has increased. At present, the amount of ammonia in the region remains normal, and supply and demand are basically balanced. The mainstream price in the region was 4050-4250 yuan/ton on Friday.

Future market forecast:

According to the analysts of the business community, the supply and demand of the domestic liquid ammonia market basically remained balanced, and the market generally stopped rising and stabilized. In the later period, many units had plans to resume production, and the supply was expected to increase or put pressure on the ammonia price. However, considering that the current agricultural demand is not decreasing, and the National Day is near, the downstream stores will be centralized before the festival, which still supports the ammonia market. In comprehensive consideration, the liquid ammonia will be operated in a narrow range and stronger in the near future.

According to statistics, the domestic ammonium nitrate market price trend was temporarily stable this week. As of the end of the weekend, the market price of ammonium nitrate was 3930 yuan/ton, unchanged from the beginning of the week’s price of 3930 yuan/ton, up 11.02% year on year.

This week, the price trend of the domestic ammonium nitrate market was temporarily stable. The domestic ammonium nitrate manufacturers operated stably. Recently, the supply of goods on the site was normal. The goods on the site were generally shipped. The manufacturer’s inventory was not high. The price of liquid ammonia at the upstream of the terminal rose. In addition, the price of nitric acid rose slightly. The price of ammonium nitrate was temporarily stable. Recently, the shipping market of ammonium nitrate manufacturers is normal, and the downstream purchase is based on demand. Recently, the demand for downstream nitro compound fertilizer is normal, but the sales of domestic downstream civil explosive industry has come to an end. The demand for ammonium nitrate has decreased, and the domestic ammonium nitrate manufacturers have not started to work. Recently, the price of ammonium nitrate is temporarily stable. Up to now, the mainstream of negotiation in Shaanxi is 4800-5200 yuan/ton, that in Shandong is 3800-3900 yuan/ton, and that in Hebei is 3900-4000 yuan/ton.

The domestic price of concentrated nitric acid rose slightly this week. As of the weekend, the average price of domestic nitric acid was 2266.67 yuan/ton, 3.03% higher than the price of 2200 yuan/ton at the beginning of the week. Recently, the domestic nitric acid plant has been operating stably, the supply of concentrated nitric acid in the market is normal, and the goods in the market are getting better. Recently, the price of nitric acid in the market is mainly rising, and the price of raw nitric acid is rising, which benefits the ammonium nitrate market. The price of ammonium nitrate market has stabilized.

The price of upstream liquid ammonia rose this week. As of the weekend, the price of liquid ammonia was 4306.67 yuan/ton, 4.19% higher than the price of 4133.33 yuan/ton at the beginning of the week. The market trend of liquid ammonia in the domestic liquid ammonia market has risen, and some manufacturers have raised their prices. Shandong, Shanxi, Hebei, Henan, Hubei and other regions have risen to varying degrees. The weekly increase is about 150-200 yuan/ton. At present, the supply pressure in this region is not big, the inventory pressure of large factories is relieved, the self consumption is increased, the export volume is reduced, and the downstream demand is just in need of support. The mainstream price in the market is 4300-4400 yuan/ton. The rising price of upstream liquid ammonia has a positive impact on the ammonium nitrate market, and the market price of ammonium nitrate is temporarily stable.

Recently, the demand of the downstream civil explosive industry has come to an end. The market demand for ammonium nitrate has weakened, and the price of liquid ammonia has risen. In addition, the price of nitric acid has not changed much. The spot supply of ammonium nitrate is normal, and the demand has not improved significantly. The ammonium nitrate analysts of the business community believe that the market price of ammonium nitrate may remain stable in the future.

According to the monitoring sample data of the business community, the average price of melamine enterprises as of September 16 was 8266.67 yuan/ton, which was the same as the price on Tuesday (September 13), increased by 6.44% compared with the price on August 16, and decreased by 13.89% year-on-year in a three-month cycle.

The melamine market was stable this week. Recently, the market price of raw material urea has risen, the cost support has improved, the equipment maintenance of some enterprises in the supply side, the melamine operating rate has declined, and the export order support of some enterprises in the demand side is fair. The domestic downstream demand follows the general trend, continuing to purchase just in need. The manufacturers mainly implement the early orders, and the market negotiation focuses on stable operation at a high level.

For upstream urea, the domestic urea market rose on September 15, and the upstream anthracite price rose slightly, with good cost support. In terms of demand, agricultural demand is small and industrial demand is gradually expanding. The rubber sheet plant started at a low level, mainly for the purchase of just needed products, and the compound fertilizer plant followed up at a low level. The price of melamine rose slightly, and the enthusiasm for urea procurement was good. In terms of supply, it is expected that the daily output of urea will be about 150000 tons in some regions with limited production.

Melamine analysts from the business community believe that at present, the price of raw material urea is relatively strong, the cost side support is strong, and the supply side has some support, but the demand side performance is average. The downstream is in conflict with the high price supply, and the enterprise mainly issues early orders. It is expected that in the short term, the melamine market will operate with a subjective expectation of stability, and more attention should be paid to the market news guidance.

According to the monitoring of the business community, the domestic adipic acid market picked up this week (9.12-16), and the price rebounded at the bottom. The weekly gain was 5.28%. Adipic acid market price range at the weekend is 9400-9800 yuan/ton. The cost continued to improve. The decline in the operating rate eased the supply pressure. The manufacturers raised prices to support the market. The downstream just needs to follow up.

From the perspective of market supply, the adipic acid operating rate was low this week, and currently maintained at 40%. The manufacturer generally raised the price, and Hualu raised the collection by 500 yuan. The inventory pressure continues to ease. At present, several sets of devices are still in the process of maintenance. Haili, Hualu and Huafeng have two sets of devices shut down for maintenance. Although Haili has one set of device for trial operation, there is still no stable product outflow. In addition, Liaohua unit maintenance, Zhonghao single line operation, Hongding still shut down, other units operated with reduced load, and the enterprise significantly reduced its inventory, which is also the main reason for the price of adipic acid to rebound. In addition, the manufacturer’s profit continued to hang upside down before, which is also the reason why the enterprise stopped production or reduced the burden.

Trend of adipic acid industry chain

As shown in the figure above, adipic acid industry chain turned red this week as a whole. In terms of the increase in the industrial chain, the upstream performance is weaker, the rebound of adipic acid is stronger, and the downstream PA66 also has a good performance. It shows that the profit pressure of adipic acid and downstream enterprises has eased slightly.

Market Trend of Adipic Acid Upstream Pure Benzene

This week, pure benzene mainly rose and fell. The spot price in East China was 7700-7900 yuan/ton. According to the monitoring of the business community, the weekly rise of pure benzene was 0.64%. Affected by the continuous weak shock of crude oil, the rise of pure benzene was restrained to some extent. The supply of pure benzene started to increase. After the Mid Autumn Festival, the market inventory consumption reached a relatively low level. The decrease in the overall supply led to a higher price of pure benzene. However, the demand side was in conflict with the high price, and in the later period, it was feared that a large number of ships might impact the domestic market, and pure benzene would fall back from the middle of the week to the weekend.

Market trend of cyclohexanone in the upstream of adipic acid

According to the monitoring of the business community, cyclohexanone rose by 1.04% this week. The main reason is that the raw material pure benzene is too rigid. Cost oriented good support. Downstream caprolactam rose steadily. Chemical fiber companies need to follow up. Driven by the good news of cyclohexanone, the low price decreased and the transaction focus increased. It’s weekend, 9800-9900 yuan/ton in East China

Market trend of adipic acid downstream PA66

Terminal demand: Adipic acid downstream slightly improved. The inventory of large factories is consumed, and the willingness to purchase terminals is enhanced after the festival. According to the monitoring of the business community, the downstream PA66 rose by 4.35% this week. Due to the independent reduction of PA66 enterprises in the early stage, the spot supply of the market contracted. In addition, the inventory position of the port is fair, and the arrival of overseas goods is average. At present, it is in the traditional peak demand season, and the demand release of downstream factories is not significant. Business confidence increased, shipments continued to rise, and the supply of low-cost goods decreased. At the weekend, the market price of PA66 in Zhejiang was 24000 yuan/ton.

In the later period, the business community believed that the crude oil may remain volatile and the upward pressure is heavy. The pure benzene rose and fell last week, and it will also face some upward pressure in the later period. The benefits from the cost side are diluted. However, the supply side remained tight, the operating rate of manufacturers was low, and prices were generally high. The key point of whether the market can continue to improve in the later period is still on the demand side. The market is generally expected to be driven by the “gold nine silver ten” market. It is expected that the adipic acid market may still follow up next week. In the later stage, attention should be paid to the commencement of enterprises and the trend of crude oil and pure benzene.

1. Industry news

1.1 Goldman Sachs downgrades the U.S. economic growth forecast for 2023

Goldman Sachs lowered its economic growth forecast for 2023 to 1.1% from 1.5%. The growth forecast for 2022 will remain unchanged at 0%. Goldman Sachs raised the federal funds rate forecast by 75 basis points in the past two weeks, and now expects the final interest rate to rise to 4% – 4.25% by the end of 2022.

Goldman Sachs also raised its unemployment rate forecast to reflect the slowdown in economic growth. It said that the unemployment rate would reach about 3.7% by the end of 2022, compared with the previous expectation of 3.6%. The prediction of the unemployment rate at the end of 2023 and 2024 will be raised from 3.8% and 4% to 4.1% and 4.2% respectively.

1.2 Fire in Russia’s largest nickel plant

The factory fire is the nickel electrolysis workshop of Kola Mining and Metallurgy Company (Kola MMC). The fire quickly spread from the ground to the upper layer of the huge industrial facilities in the suburb of the northern city of Monchegorsk.

According to the video released on the on-site social media, the fire lasted for a long time. The company is a subsidiary of Norilsk Nickel, the largest nickel producer in Russia. The company accounts for about 10% of the world’s nickel supply.

Five years ago, after the old nickel factory in Norilsk, Tamil Peninsula was closed, the factory in Baikame, Monchegorsk became the largest nickel factory in the world.

2. Message interpretation

From the macro perspective, according to the observation of the CME Federal Reserve, the probability of the US interest rate increase of 75bp in September rose to 82%, and the US dollar is still strong, which will still create some pressure on the non-ferrous sector. Although the uncertainty is small, we still need to pay attention to the decision of the Federal Reserve to raise interest rates in the week.

On the domestic side, the central bank’s competent media predicted that with the implementation of a package of stable growth policies and their follow-up policies, the domestic economic rebound momentum will be consolidated and strengthened, and the RMB exchange rate will eventually return to reflect the stable and good fundamentals of China’s economy.

Therefore, from the perspective of domestic economy, stable growth is still the main theme.

In terms of industry, the electrolysis plant of a subsidiary of Rusal Nickel suffered from fire. Russian nickel accounts for about 10% of the global nickel supply output. However, the fire occurred in the subsidiary’s electrolysis workshop, which is expected to have limited impact on the actual supply, and more emotional panic.

Therefore, the nickel price was extremely strong last Friday night. At present, the impact of the event should have ended.

 
3. Variety logic

The production schedule of stainless steel recovered on a month on month basis in September, which led to an increase in demand for ferronickel. The price of ferronickel was firm, forming a certain support for the price of electrolytic nickel.

However, in the medium term, the release of a large amount of ferronickel capacity in Indonesia will lead to excessive supply of ferronickel, so ferronickel prices will return to a weak position in the medium term. As the price difference between electrolytic nickel and ferronickel is still at a high level, short-term support for electrolytic nickel prices, although there is, will not be too strong.

The impact of the time when the Russian nickel plant caught fire is limited, and the current price should have fully digested it.

In terms of demand, the nickel bean self melting technology of nickel sulfate is still economical, or will increase the demand for nickel beans.

In the medium and long term, the trend of nickel oversupply is obvious, and the price center will gradually fall back.

Operation suggestions:

Short sellers insist on holding, or they may create short orders when high.