SunSirs: Supply and Demand Pressure Weighs on Prices as Ethylene Glycol Downstream Demand Remains Sluggish

According to Sina Finance, ethylene glycol production operates at high capacity with ample output and low inventories. Significant additional capacity is slated for commissioning, while low coal and oil prices have improved margins for coal-based and oil-based production, further boosting ethylene glycol output. Downstream demand growth remains limited and is expected to stabilize. Short-term supply-demand pressures remain substantial, with strong expectations for inventory buildup, potentially prolonging the weak market trend.

Supply pressure remains substantial, with planned maintenance in November showing a slight increase. As of October 30, mainland China's overall ethylene glycol operating rate stood at 76.19% (up 2.7% month-on-month), with the operating rate for oxalic acid catalytic hydrogenation (syngas) ethylene glycol production at 83.44% (up 9.08% month-on-month).

Unit Updates: Zhenhai Refining & Chemical's 800,000-ton/year unit is expected to restart around mid-November. Fude Energy's 500,000-ton/year unit has preliminary maintenance plans for December, with details pending. Shenghong Refining & Chemical's 900,000-ton/year line began shutdown on October 22, expected to last 35-40 days. Tongliao Jinmei's 300,000-ton/year unit is expected to resume production around early November; Henan Coal Industry (Puyang)'s 200,000-ton/year EG unit is projected to restart around mid-to-late November; Tianying's 150,000-ton/year (natural gas feedstock) unit was shut down in mid-to-early September due to unforeseen circumstances and is expected to remain offline until March next year; Inner Mongolia Yankuang's 400,000-ton/year line will undergo maintenance shutdown from November 1 to 25; Jianyuan's 260,000-ton/year facility halted production in early September and is tentatively scheduled to restart in November; Yulin Chemical's 400,000-ton/year maintenance originally planned for November has been canceled; Zhengda Kai's 600,000-ton/year facility plans a 10-day maintenance shutdown in November.

Downstream demand for ethylene glycol has shown slight recovery but at a slow pace. As of October 31, polyester yarn operating rates stood at 66%, up 1.8 percentage points month-on-month; Jiangsu-Zhejiang weaving machine operating rates reached 76%, increasing by 6 percentage points month-on-month.

In summary, ethylene glycol fundamentals remain unchanged. Inventory buildup may occur later, and futures markets are expected to trade in a weak range.

As an integrated internet platform providing benchmark prices, on November 17, the benchmark price of ethylene glycol onSunSirs was 4133.33 RMB/ton, a decrease of 2.07% compared with the beginning of the month (4220.83 RMB/ton).

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Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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