Strong ethylene glycol / ethylene oxide bull market in sight

wallpapers Industry 2020-12-09
With the emergence of ethylene business cycle, the prices of ethylene glycol, ethylene oxide and styrene in the downstream of ethylene have risen sharply since this year, reaching 41.2%, 41.4% and 52.6% respectively, and the price difference has reached a high point in recent years. Compared with the beginning of the year, the price difference has increased by 2114 yuan / ton, 2943 yuan / ton and 3311 yuan / ton respectively, and the profit is greatly improved. Looking forward to the future, ethylene glycol and ethylene oxide will usher in a high boom stage along with the ethylene cycle.

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ethylene downstream derivatives prices continue to strengthen.

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as one of the most important chemical products, the investment of ethylene single set is more than 10 billion yuan, and the construction period is as long as five years. This round of boom is largely due to the sharp drop in oil prices. There is no unexpected variable in the industry. Therefore, even if the construction is started now, it is difficult for the ethylene production capacity of oil head to play an effective role within three years. Therefore, under the current situation that the supply of the industry is in short supply, the operating rate of ethylene is expected to rise to more than 90% in 2016 with almost zero growth at the supply end. In the downstream of

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, polyethylene (55.6%), ethylene glycol / ethylene oxide (21.8%) and styrene (10.6%) are the main ethylene downstream products. In the international scope, PVC (12%) is also used, but coal head route is basically adopted in China. Since ethylene is gaseous at room temperature, it is mainly made into polyethylene for sale, so the ethylene cycle is also characterized by polyethylene. This year, with the continuous strengthening of ethylene price, the price of the whole downstream derivatives of ethylene has risen sharply, and the profitability per ton has also been greatly expanded. From the long-term perspective, the profit trend of downstream products of ethylene is basically similar, the reasons are as follows:

first of all, the whole ethylene industry chain is basically in the hands of Sinopec and PetroChina, and the upstream and downstream capacity matching is very high. However, in the past two years, the two companies have basically no production capacity of ethylene. Therefore, due to the limitation of raw materials, the expansion of all downstream ethylene products is very limited.

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followed. In the past few years, the growth rate of demand for main downstream products of ethylene was basically inversely proportional to the volume of ethylene. Polyethylene was the slowest, while ethylene glycol and ethylene oxide of small varieties were faster. Therefore, in the past few years, under the background of the overall economic downturn of ethylene, polyethylene had the worst profit, the slowest capacity expansion and the most obvious supply contraction. In this round of ethylene boom reversal, it was the first to get out of the trough. Therefore, downstream enterprises are more inclined to use ethylene to produce polyethylene with better profitability than ethylene glycol and ethylene oxide.

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once again, Sinopec and PetroChina mainly focus on the yield of diene, while polyethylene is easy to produce and sell. Therefore, even when the profit of polyethylene is very poor, downstream enterprises often maintain a high load, rather than switch to produce more profitable ethylene glycol and other products. The high import dependence of

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has brought about a high prosperity of ethylene glycol.

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since 2014, the price of ethylene glycol has also been very strong, and the price has even reached a new high since 2014. The main reason is that in 2014, with the large production of PTA, the consumption of ethylene glycol, as the supporting production of polyester filament, also increased significantly, with a year-on-year growth rate of 12%. However, due to the fact that China has been heavily dependent on imports of ethylene glycol, even if the capacity growth reached 50% in 2014, the import dependence is still as high as 65%. Looking forward to the future, even if this year's new production capacity is expected to be 1.95 million tons and the expansion rate is 50%, the degree of dependence on imports will remain around 60%. Moreover, many of the coal chemical production capacity will be put into production in the future. Due to the problems of environmental protection, water resources and technology, the actual production situation is likely to be far lower than the planned capacity, so the overall prosperity will remain high.

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at the same time, the ethylene glycol unit of Yangzi Petrochemical Co., Ltd. recently suffered an accident, resulting in a total shutdown of its 260000 ton ethylene glycol and ethylene oxide co production unit, which is expected to be unable to resume work in the short term. Although the shutdown of chemical enterprises due to accidents is accidental, the author believes that with the approaching of the traditional petrochemical overhaul season in the second and third quarters, the prosperity of ethylene glycol industry is expected to further improve. The situation of

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epoxyethane riding on the bull market of ethylene glycol is quite different from that of ethylene glycol. Due to the high growth and insufficient supply of downstream, ethylene oxide entered the bull market from 2011 to 2012, and the price difference was maintained at around 5000 yuan / ton throughout the year. The share price of Sanjiang Chemical, a leading enterprise listed in Hong Kong stock market, tripled in the same period. However, due to the expansion of production capacity due to the high prosperity, the new production capacity of ethylene oxide reached 1.79 million tons in 2014, an increase of 82% compared with 2013. Therefore, since the second half of 2013, the prosperity of ethylene oxide industry began to decline significantly, and the whole industry also basically fell into a state of non-profit in 2014. Judging from the current supply and demand situation of the industry, it is estimated that the total demand for ethylene oxide this year will be 2.24 million tons, and the total supply will be 3.736 million tons. Under normal circumstances, the operating rate is only 60%. Judging from this data alone, it is difficult for the ethylene oxide industry to improve greatly in the next few years.

, but the actual situation is exactly the opposite! The fundamental reason is that the bull market of ethylene glycol will be directly transmitted to the ethylene oxide industrial chain, because as many as 68.1% of domestic oil head ethylene oxide and ethylene glycol enterprises are co production process, and the devices can be switched between each other. Therefore, when the profit of ethylene glycol is high, many enterprises will switch their production capacity of ethylene oxide to ethylene glycol, which will reduce the production capacity of ethylene oxide, and eventually lead to the price rise of ethylene oxide.


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Tag: Ethylene strength