Asian ethylene glycol market under double pressure

Author: Pang Xiao Source: China Chemical Industry News November 4, 2019

Recently, the market demand for ethylene glycol has slowed down. What is worse is that the new plant will also be completed and put into production. The Asian ethylene glycol market will face greater pressure in the future.

In the fourth quarter of this year, two major ethylene glycol plants will be completed and put into production in Asia, with a total capacity of 1.65 million tons per year. According to industry insiders, the National Petroleum Corporation of Malaysia is in the trial operation of a new 750,000-ton/year ethylene glycol plant. The device is expected to be officially put into production in November. China Hengli Petrochemical's new set of 900,000 tons/year ethylene glycol plant will also be put into operation in November.

Asian traders said: \"The upcoming new supply is putting pressure on the market, and Asian ethylene glycol producers may be forced to cut operating rates when the price gap between ethylene glycol and naphtha narrows.\" It is said that the current spot price of ethylene glycol for shipment in November in the Asian market is US$538/ton to US$540/ton (CFR), while the bidding prices of buyers are US$530/ton to US$535/ton (CFR). According to data from An Xunsi, in the week ending October 18, the price of ethylene glycol in the Asian market fell to US$549/ton to US$556/ton (CFR), a decrease of about 2% from the price in mid-September.

On the demand side, downstream polyester producers are facing pressure from rising inventories. According to data from An Xunsi, the average operating rate of polyester plants in China fell to 88.62% for the week ending October 18, down from 89.06% a week ago. A major downstream end user said: \"If polyester stocks continue to increase, the operating rate of polyester plants may decline further.\"