Introduction: Domestic ethylene glycol prices have continued to decline recently, and the market is heavily pessimistic. From 8,300 yuan/ton after the Spring Festival, as of February 28, spot transactions in the mainstream market in East China have dropped to 6,970 yuan/ton. So what is the biggest problem facing the market currently?
Due to the high prices in China in the early stage, a large number of goods from the Middle East were concentrated in the port. It was the Spring Festival holiday at this time, and the market consumption was slow, causing the terminal inventory to continue to rise. Downstream polyester demand recovered slowly after the holidays, and the market crash caused downstream purchasing mentality to be frustrated, and inventories continued to rise. The agency’s latest data shows that East China’s ethylene glycol inventory totaled 587,000 tons on March 1, an increase of 37,000 tons from Monday, February 27. Among them, Zhangjiagang has 338,000 tons (the average daily shipment of a certain warehouse is around 5,600 tons); Taicang has 128,000 tons; Ningbo has 79,000 tons; Jiangyin has 16,000 tons; and Yangshan has 26,000 tons.
Recently, the operating rate of domestic ethylene glycol units has steadily increased. According to data, the comprehensive operating rate of domestic ethylene glycol reached 76.70% in February, an increase of 4.41 percentage points month-on-month. In terms of output, the output in February reached 491,900 tons, a record high. Due to the constraints of the Spring Festival, the demand situation is not ideal, which has led to the current inventory pressure of ethylene glycol factories and heavy pressure to destock.
The slow recovery of demand in the terminal weaving industry after the Spring Festival has caused polyester factory product inventories to continue to rise. According to the latest data, the polyester filament inventory in Jiangsu and Zhejiang is approximately 10-28 days, of which POY inventory remains at 11-22 days, FDY inventory remains at 9-25 days, and DTY inventory remains at 12-33 days. Polyester staple fiber factory inventory remains around 13-19 days.
In summary, the current inventory of the entire polyester industry chain remains high. Under the pressure of destocking, merchants are pessimistic about the market outlook. In addition, merchants are not enthusiastic about entering the market at the beginning of the month, resulting in Market sentiment is light. It is predicted that the short-term market downward pressure will still be heavy, and it is recommended that merchants adopt a short-term thinking and mainly go short on rallies.
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