On March 24th, the domestic ethylene glycol market was operating relatively strongly, with the mainstream spot market in East China closing at 5900 yuan/ton,+160 yuan/ton; The South China market followed the mainstream market and performed strongly, with tight resource supply in the region, closing at 6150 yuan/ton,+250 yuan/ton.
Fundamental analysis:
Supply: As of March 23, the inventory of diethylene glycol at ports in East China was 44100 tons, a decrease of 7900 tons compared to the previous statistical period. This week (March 24-30), Zhangjiagang Diethylene Glycol is expected to arrive at a ship of 5000 tons, with a decrease in expected port arrivals and slow downstream recovery. Port shipments remain stable, and inventory at the main ports in East China continues to decline this week.
Demand: Downstream performance falls short of expectations and lacks momentum to chase after price increases. According to statistics, the average operating rate of unsaturated resin factories in China this week was 37%, a decrease of 1.0% from the previous period. On March 23, the total amount of shipments from the two storage areas in Zhangjiagang was 1314 tons, an increase of 191 tons from the previous day.
Cost: The situation in the Middle East has led to significant production cuts in multiple oil producing countries, and there are reports that the United States may deploy additional ground forces, increasing supply risks. The US side claims to have made positive progress in negotiations with Iran, easing market concerns and causing international oil prices to fall. However, Iran later denied this, leading to an increase in international oil prices.
Market expectation: There will be a slight decrease in supply this week due to the tense situation in the Middle East and the continuation of supply disruptions. Main port inventories are expected to continue to deplete. However, the demand side is resistant to high prices, and the market lacks sustained driving force. On Tuesday of this week, the ethylene glycol market maintained a strong and volatile pattern, and downstream purchasing sentiment was cautious.