On January 12th, the groundbreaking ceremony for the process package of the gasification and ethylene glycol units of Xinjiang Henglian's 1.2 million tons/year (Phase I: 600,000 tons) coal-to-ethylene glycol project was held in Xi'an. The project uses hydrogen and carbon monoxide as raw materials and employs Aerospace Mawei's gasification technology. The completion of this project is of practical and long-term significance in leveraging abundant coal resources, supplementing domestic oil and gas shortages, meeting the demand for chemical products, ensuring energy security, and promoting sustainable economic development.
This project adds 1.2 million tons of ethylene glycol production capacity per year (600,000 tons in the first phase), significantly increasing market supply expectations and potentially leading to downward pressure on spot prices. Combined with ethylene glycol futures data (such as the main contract 2605 settlement price of 3,831 RMB/ton, down 38 RMB/ton), the increased supply reinforces oversupply expectations, exerting strong bearish pressure on futures prices, especially as changes in open interest for far-dated contracts indicate bearish market sentiment. Overall, the project's commissioning will alleviate supply and demand tensions, but it will negatively impact prices in the short term.
As an integrated internet platform providing benchmark prices, on January 14th, the benchmark price of ethylene glycol, according to SunSirs, was 3,815.00 RMB/ton, a decrease of 1.27% compared to the beginning of the month (3,864.17 RMB/ton).
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