The Two Quarter Was Difficult To Turn Around.

In March 30th, under the pressure of panic, the price of ethylene glycol fell below the 3000 yuan / ton integer mark, but it was quickly restored. The market recovered 3200 yuan / ton important barrier in April, and it was arranged around 3300-3400 yuan / ton price in most of the time.

After the first quarter of the fall, the trend of ethylene glycol in the two quarter can be turned over. At the current point, whether or not we can copy the bottom has become the focus of market attention.

In this regard, we first analyze the macroeconomic situation faced in the two quarter.

The impact of overseas epidemic is difficult to mitigate in the two quarter.

At present, China's epidemic situation has been basically controlled, and domestic production and business activities have gradually returned to normal. However, there is still no turning point in overseas epidemic. As of April 16th, the number of confirmed cases has reached over 2 million. Among them, the number of confirmed cases in the United States has reached more than 630 thousand people, making it the center of the world epidemic. The number of confirmed cases in India has reached over 12 thousand. The development of post epidemic has hidden worries. Therefore, the spread of the epidemic around the world is still an important factor in the market trend.

International crude oil closed down, but rebounded limited.

In the two quarter, the double impact of the international crude oil epidemic at home and abroad and the oil price war broke out, and the crude oil fell to below 20 US dollars / barrel. After entering the two quarter, with the achievement of the oil production reduction agreement reached, the epidemic situation has gradually improved, and the darkest time has passed. Therefore, the oil price in the two quarter should go out of the bottom step by step, and the contradiction between supply and demand will also ease.

The trend of energy and chemical industry will be differentiated

In the first quarter, with the collapse of crude oil, many changes occurred. Industrial products also fell sharply, and some chemical products hit a new low in the past 20 years. At the end of the first quarter, chemical products had rebounded from the low level, but their confidence was temporarily unable to recover. The rebound was highly limited, and there was obvious differentiation. Some products with higher resilience were just needed, while the products with relatively high consumption elasticity were still weak in the two quarter. Constant strength, this trend of differentiation will intensify.

After analyzing the external causes, let's look at the internal factors.

Capacity expansion is obvious, factory profits can still supply pressure continues to increase.

The first is the capacity expansion of ethylene glycol. In the first quarter, China's three sets of integrated devices and a set of coal production units achieved mass production, involving 2 million 950 thousand tons of capacity, exceeding the annual growth rate of the rapid expansion of production capacity in 2018. The collapse of crude oil has made a great increase in the processing profit of ethylene glycol. Therefore, the production of ethylene glycol plant has a high enthusiasm. Although the cost side of the coal plant is under great pressure, the capacity of the coal plant is relatively small. Therefore, the overall operating rate of ethylene glycol will maintain a high level in the two quarter, and the supply side will increase significantly compared with last year.

The epidemic has far-reaching impact on demand side.

Demand side, last year, the apparent consumption of ethylene glycol in China is about 18 million tons, and this year, the main demand for polyester production of ethylene glycol will face a dilemma of negative growth. The main reason is that the terminal demand of polyester is clothing and weaving, which is a large elasticity demand, and is affected by the economic environment. The terminal demand of bunches and glycol is also difficult to improve. Under this background, the demand side of ethylene glycol will not be able to return to normal for a long time in the future.

Market volatility in the two quarter is limited.

Taking all these factors into account, the trend of ethylene glycol in the two quarter is still not optimistic. If the supply and demand imbalance does not see any signs of improvement in the future, ethylene glycol will also become a product of short allocation even if the macro level is improving. Therefore, it is estimated that in the two quarter, the price of ethylene glycol is below 3200 yuan / ton. This price is the important cost line of the coal glycol plant. It is difficult to be broken under the condition of no greater loss. The upstream pressure level is estimated at 3800 yuan / ton.