Urea futures are coming on the market on Friday. Urea is in a state of weak overall fundamentals and tight partial equilibrium. According to statistics released by the National Bureau of Statistics, as of July 20, the average price of small granular urea in the national market was 1964.30 yuan/ton, down 27.4 yuan/ton from the same period last month, a decline of about 1.38%. The peak season of domestic agricultural fertilizer demand is from March to May. At present, urea prices have decreased significantly compared with the peak season of demand. Although there are still some orders to export to India in the near future, which has slowed down the decline, most manufacturers will export goods to port next week or end shipments one after another. Domestic agricultural market demand is slowly declining due to seasonal impact, industrial demand is also showing a downturn, and in a short period of time demand is difficult to show signs of warming up, market sentiment is generally pessimistic. According to our survey in Shanxi and Hebei provinces, the industry is generally not optimistic about the future market, urea prices have been expected to decline at least until October will not change.

Since the beginning of the year, domestic urea production has been rising oscillatively. In the first seven months of 2019, the cumulative domestic urea production was about 30.88 million tons, an increase of about 1.455 million tons, or about 4.94%. From the perspective of start-up rate, the start-up rate of domestic urea enterprises has basically stabilized at the front line of 68% in the last two months after experiencing a sharp increase in the first quarter. Recently, some enterprises have finished overhaul and started production: Shaanxi Shaanxi Shaanxi 1 million tons of production capacity, daily output increased by 3400 tons; Shanxi Yangfengxi 800,000 tons of production, daily output increased by 2500 tons; Hulun Bell Jinxin, Shandong Ruixing and Inner Mongolia broad field, and so on. In recent years, many plants have been shut down for overhaul or planned to shut down for overhaul. For example, the annual shutdown of Zhongying 800,000-ton plant in Anyang, Henan, affects the capacity of 2600 tons per day; Ordos Chemical and Shandong Hualu parts of the plant are also planned to shut down for overhaul in August, affecting the capacity estimated at 5800 tons per day. Due to the current environmental restrictions in China, especially the impact of sulfur dioxide quota in North China, it is difficult to approve new urea plants, and the probability of future capacity increase is not very large.

Most of the increased supply is assimilated by rising exports. According to the data of the General Administration of Customs, the cumulative export volume reached 17678,000 tons in January-June this year, up 10.641 million tons from 7037,000 tons in the same period last year, an increase of more than 151.20%. However, the import is affected by the increase of domestic output and the slow growth of demand, which shows a considerable decrease over the same period of last year. In the first six months of this year, the cumulative import volume was 1041,000 tons, down by 34,600 tons, or 24.96%. Especially in June, the import volume dropped to almost zero, and the import volume in the second half of this year is likely to continue the sluggish situation in the first half of this year. Overall, net exports increased significantly in the first half of this year, reducing the impact of supply growth on the domestic market.

At present, the domestic summer urea topdressing is basically over, and the demand for agricultural urea is gradually declining. In August, except for a small amount of fertilizer used in some southern markets, most areas of China will enter the off-season of agricultural urea fertilizer. The demand for urea for industrial use in China is also relatively low due to the pressure of environmental protection on the downstream industry. Taking plywood as an example, the purchasing managers’index of plywood has been declining since March, which is 20.63 points lower than the high of 58.07 in March. Linyi, Shandong Province, an important domestic plywood producing area, has recently been under unprecedented pressure of environmental protection and production restriction. It is understood that the Office of the Leading Group of the Air Pollution Prevention and Control Action in Linyi City has issued the Implementing Plan for Strengthening the Control and Control of Air Pollution in Key Industries in July. According to the requirements of the plan, the 50% steam limit for thermal users has been operated since 24:00 on July 14, 2019. Linyi is divided into four areas A, B, C and D, and shut down in turn for six days each time. Gas and power outages are directly taken in the areas where shutdown occurs. At present, production in Lanshan and Luozhuang districts has begun to stop. The plywood factories in Linyi region have begun to stop production, and this situation may last until the end of August or even later. Now it seems that the resumption of production of plywood plants in Linyi downstream is far away. If it lasts for 2-3 months, it will not only have a great impact on the local industrial urea demand and spot market, but also have a certain impact on the overall price of urea.

On the whole, the fundamentals of urea are not very optimistic. Supply growth is not enough under the pressure of off-season agriculture and industrial environmental protection. It is expected that the situation of urea market will not be optimistic, and spot prices will continue to bear pressure. After urea futures are listed, urea enterprises can use futures to carry out hedging operation, lock in the selling price and avoid the risk of price falling. The turning point of domestic urea market is the resumption of production of plywood plants in Linyi area and the improvement of international urea market. Once the production resumes, the plywood enterprises in Linyi will start full capacity production, and then the demand for urea will increase significantly. At the same time, India’s next round of urea import bidding or after September, if the winning price rebounds, it will have a greater impact on domestic urea exports, thereby affecting the mentality of domestic urea market operators, should also be given priority attention.

On August 7, the rare earth index was 374 points, up 1 point from yesterday, down 62.60% from the cyclical peak of 1000 points (2011-12-06), and up 38.01% from the lowest point of 271 on September 13, 2015. (Note: Period refers to 2011-12-01 to date).

The average price of Neodymium in rare earth metals increased by 1500 yuan/ton to 387,500 yuan/ton, dysprosium metal by 2.3 million yuan/ton and praseodymium metal by 700,000 yuan/ton. The average price of praseodymium and neodymium oxides in rare earth oxides increased by 4000 yuan/ton to 313,500 yuan/ton; the price of dysprosium oxide increased by 10,000 yuan/ton to 19,500 yuan/ton; the average price of praseodymium oxide was 390,000 yuan/ton; and the average price of neodymium oxide increased by 4,000 yuan/ton to 315,000 yuan/ton. The price of praseodymium and neodymium alloys in rare earth alloys increased by 1500 yuan/ton to 387,500 yuan/ton, and the average price of dysprosium ferroalloys increased by 10,000 yuan/ton to 19,400 yuan/ton.

Recently, the prices of some products in the rare earth market have risen continuously, the domestic rare earth market has risen, and the prices of some commodities in the rare earth market have temporarily stabilized. However, the prices of some products in the rare earth market have continued to rise, dysprosium metals have warmed up, praseodymium and neodymium series products have continued to rise in the near future, the market supply is normal, and the prices of light rare earths are near. Expectations are higher. The price fluctuation of rare earth market is related to environmental protection supervision in the whole country. Rare earth production has its particularity, especially the radiation hazard of some products, which makes environmental protection supervision stricter. Under strict environmental protection inspection, rare earth separating enterprises in many provinces have stopped production, resulting in a general market input of rare earth oxides, especially some mainstream rare earth oxides, with normal supply and rising prices in the rare earth market. Recently, large enterprise groups in the field are reluctant to sell, and the rare earth market is on the rise, but the pricing of products is still high. Major manufacturers are also cautious.

Recently, the State Environmental Protection Department has made no reduction in its stringent efforts, which has a greater impact on the rare earth industry. The rare earth industry has a low start-up and a cold market. At the recent press conference on macroeconomic operation held by the Development and Reform Commission, Meng Wei, spokesman of the National Development and Reform Commission (NDRC), answering reporters’questions on rare earth, said that on the basis of in-depth investigation and scientific demonstration, relevant policies and measures would be put forward to give full play to the special value of rare earth as a strategic resource. Due to the increasingly obvious regulatory effect, the supply of raw ore resources in the upstream of the rare earth industry has shrunk, the demand in the downstream is normal, and the trading market of the rare earth industry has increased.

Rare earth analysts of business associations expect that the domestic environmental stringency will not decrease in the near future, coupled with the domestic rectification of the order of the rare earth industry, Myanmar’s export restrictions and normal supply, but the recent increase in rare earth market transactions, rare earth market prices are expected to continue to rise.

According to the price monitoring of business associations, the price decline of PTA spot market in China slowed down on August 7, falling 0.21% from the previous trading day and 27.36% from the same period last year. Futures market shocks adjusted, the main futures (1909) closed at 5148 yuan/ton, up 2 yuan/ton from the previous trading day, an increase of 0.04%. In the import market, PTA US$offer refers to US$680-700 per ton, while the supplier of one-day tour source reports US$730-760 per ton. No public transaction has been heard yet.

Recent PTA device changes:

Enterprise Name, Capacity (10,000 tons) Device Dynamics
Livan polyester 70 July 27 Parking for reasons, restart pending
Jiaxing Petrochemical Company stopped short on July 27 and restarted in early August
Fuhua Chemical Trade Restarted on August 1, 450
Yizheng Chemical Fiber 35. 45 Days of Parking and Maintenance on August 1
Jialong Petrochemical Co. Ltd. Parking overhaul for 2 weeks on August 2
Hengli Petrochemical 220 plans to overhaul the No. 1 production line in August, and the overhaul time is about 15 days.

In August, PTA plant restart and overhaul coexist. Fuhua Chemical Trade 4.6 million tons, Jiaxing Petrochemical 1.5 million tons restart, Yizheng Chemical Fiber 350,000 tons, Jialong Petrochemical 600,000 tons stop and overhaul one after another. At present, PTA start-up load is maintained near 95%.

Cost side is still weak. The closing price of WTI main futures for international crude oil on August 6 was 53.63 US dollars per barrel, down 1.06 US dollars per ton from the previous trading day, and the closing price of BRENT main futures was 58.94 US dollars per barrel, down 0.87 US dollars per ton from the previous trading day. Domestic PX price trend is stable, maintained near 7000 yuan/ton. The Asian PX market closed at $773/ton for FOB Korea and $793/ton for CFR China, down $5/ton from the previous trading day.

Start-up Change of PTA Industry Chain Related Products

Downstream polyester cash flow improved, profits recovered, some parking plants restarted, start-up load increased to 84%, there is a short-term replenishment action. But the textile terminal orders are still cold, just need careful purchase. The comprehensive starting rate of looms in Jiangsu and Zhejiang is 62%. The production and marketing of polyester is low and preferential promotion is dominant. The prices of mainstream factories in Jiangsu and Zhejiang are reduced by 100-200 yuan/ton. Among them, polyester POY (150D/48F) is between 7600-7750 yuan/ton, polyester FDY (150D/96F) is between 7700-8200 yuan/ton, and polyester DTY (150D/48 yuan/ton). F low bomb) at 8950-9250 yuan/ton.

Business analyst Xia Ting believes that demand is expected to improve due to the slight increase in downstream polyester start-up, which will support PTA in the short term. However, the persistence of resumption needs to be verified, as well as factors such as weakness of cost side and uncertainty of macro environment, PTA prices will remain weak.

Price Trend

According to the monitoring data of business associations, as of August 6, the latest domestic price of cyclohexanone was 8,233 yuan/ton, rising by 3.35% annually and falling by 31.39% year on year. Domestic cyclohexanone market is weak.

II. Market Analysis

Products: Cyclohexanone market is weak, chemical fiber market demand is general, solvents just need to be purchased, market turnover is flat. The mainstream offer of cyclohexanone in North China market is delivered in cash from 8100 to 8200, the mainstream offer in East China market is delivered in cash from 8300 to 8400, and the mainstream offer in South China market is delivered in cash from 8700 to 8800.

Industry chain: pure benzene: pure benzene gravity center fell. Market information is less, the business people are more cautious, market trading is light, trading less. There was a lot of bullish sentiment on the spot, and the spot of pure benzene in East China fell to 5000-5040 yuan/ton. Shandong market and East China arbitrage window opened, but the overall delivery is still not smooth, downstream just need to pick up goods, high local refining inventory, prices fell to 4800-4850 yuan/ton. Caprolactam: Domestic caprolactam liquid spot market is cautious. The main liquid spot price in East China market is 12200-12400 yuan/ton, which is delivered by acceptance; part of Shandong’s price is 11700 yuan/ton, which is remitted out of the factory now. The pressure of aggregation cost is high, the demand downstream is not good, and the purchase of raw materials is cautious.

3. Future Market Forecast

Cyclohexanone analysts, business associations, predict that the domestic market for cyclohexanone will be weak in the short run.

Price Trend

According to the price monitoring of business associations, the average ex-factory price of sulphur market in East China is 810 yuan/ton, a decline of 5.81%. On August 6, the sulphur commodity index was 44.44, down 2.75 points from yesterday, down 57.20% from 103.84 points in the cycle (2011-11-02), up 27.41% from 34.88 points on October 23, 2016. (Note: Period refers to 2011-09-01 to date)

II. Market Analysis

Products: Domestic sulphur market prices have been sharply lowered, downstream demand performance is still weak, terminal purchasing enthusiasm is weak, in order to stimulate shipment, refineries in various regions have adjusted their prices. Eastern China market has dropped by 30-50 yuan/ton, the mainstream price of solid sulphur is about 680-740 yuan/ton, and the mainstream price of liquid sulphur is about 660-730 yuan/ton. The price of solid and liquid sulphur in Shandong market was reduced by 30-50 yuan/ton, the mainstream price of solid sulphur was around 870-880 yuan/ton, the mainstream price of liquid sulphur was around 710-770 yuan/ton, the mainstream price of solid sulphur was about 680-730 yuan/ton and the mainstream price of liquid sulphur was 650-690 yuan/ton in North China market.

Industry chain: The vulnerable sorting of sulphur market continues to decline. The downstream acid market currently has a cold trading atmosphere, obvious contradictions between supply and demand, prudent trading by businessmen, poor mindset of business operators, hard to find in real negotiations, and low prices are expected or will go down.

Industry: From the demand point of view, downstream stalemate, weak demand, difficult to change. Domestic port inventory is high, market turnover is still cold, real information is scarce, port storage consumption is slow, buyers and sellers wait for information guidance. Domestic sulphur market continued to decline, downstream demand has not improved, industry expectations of the future market is not high, look at the strong atmosphere.

3. Future Market Forecast

Business sulfur analysts believe that the current sulfur market lacks information guidance, no substantial positive factors, downstream demand has not improved temporarily, coupled with high Hong Kong deposits, the short-term sulfur market is expected to continue a weak downturn.

According to the price monitoring of business associations, domestic PTA spot market prices continued to decline on August 5, falling 2.99% from the previous trading day and 25.53% from the same period last year. Trading atmosphere is general, the focus of buying and selling in spot market is long-term, and the enthusiasm of buying is not good. In the futures market, the main futures (1909) closed at 5158 yuan/ton, down 140 yuan/ton, or 2.64% from the previous trading day. In the import market, PTA US dollar quotation refers to US$700-710 per ton, while the supplier of one-day tour source quotes US$730-760 per ton. There is no public transaction heard yet.

Enterprise Name, Capacity (10,000 tons) Device Dynamics

Jialong Petrochemical 60 plans to stop for two weeks on August 2

Fuhua Chemical Industry & Trade 450 discharged on August 1. The device has been shut down since July 9.

Yizheng Chemical Fiber 35. Stop and repair for 45 days from August 1

Livan polyester stopped at the end of July and restarted to be determined.

Sichuan Energy Chemistry 100 July 26 Short stop for 2 days

Jiaxing Petrochemical 150 malfunction stopped short on July 27 and restart time is to be determined

Hengli Petrochemical 220 plans to overhaul the No. 1 production line in August, and the overhaul time is about 15 days.

In terms of equipment, in August, the annual output of Yizheng Chemical Fiber is 350,000 tons. The PTA plant has been shut down for 45 days. Fujian Jialong Petrochemical Company produces 600,000 tons of PTA plant annually for two weeks. In addition, the 4.5 million tons plant of Fuhua Chemical Industry and Trade was restarted last week. The PTA start-up load increased to a high level near 95%, and the supply side boosted obviously.

On the cost side, the domestic PX price trend remained stable. On August 5, the domestic ex-factory price of p-xylene was 7,000 yuan/ton, down 15.66% year on year. Prices in Asia’s PX market weakened sharply, closing at $810 per ton CFR in China on August 2, down by $30 per ton from the previous day.

Although the downstream polyester cash flow has been repaired, the weaving industry is still facing great pressure. The polyester market is stable and declining. The quotation of some mainstream factories in Jiangsu and Zhejiang has been lowered by 50 yuan/ton. Among them, polyester POY (150D/48F) is 7800-8000 yuan/ton, polyester FDY (150D/96F) is 7850-8200 yuan/ton, and polyester DTY (150D/48F low elasticity) is 9150-9250 yuan/ton.

Business analyst Xia Ting believes that the current PTA processing error compression, planned maintenance devices increased, but the large device restart, weakening the effect of other equipment maintenance, and part of the maintenance plan is yet to be implemented. In addition, Fuhai Chuang 1.6 million tons of PX device has been restarted, Sinochem Hongrun new device has been put into operation, the cost side will continue to move down. The downstream terminal orders are insufficient, and the off-season characteristics will become more obvious. The trend of upstream and downstream is weak, and the short-term weakness of the fundamentals is difficult to change. It is expected that PTA will continue to decline more likely.

Industry insiders: new devices are put into operation and demand is growing steadily

On August 1, the “Ethylene Glycol Sub-Forum” of the Global Petroleum and Chemical Industry Economic Situation Analysis Conference was held in Yantai, Shandong Province. Several guests from enterprises, institutions and industry associations shared their views and views from different perspectives on the current market situation and industry characteristics of Ethylene Glycol.

Futures Daily reporters learned that, in addition to economic and trade frictions, there has been little change in the demand side of ethylene glycol. The sustained decline since September 2018 was mainly triggered by the concentration of new capacity. According to statistics, the price of ethylene glycol in the main textile raw material market has fallen from 8,230 yuan/ton in early September 2018 to 4,430 yuan/ton in late July 2019, which is close to a “lumbar cut”. In view of the fact that a large number of new projects are planned to be put into operation in the next two years, some guests said that “the market price of ethylene glycol is expected to remain low from 2019 to 2020, and enterprises should be prepared to live a hard life”. In addition, the reporter also learned that the domestic project of coal-based ethylene glycol has developed rapidly in recent years, and great progress has been made in both technology and scale of production. The development and improvement of coal-to-ethylene glycol has gradually become the focus of attention in the chemical industry.

Demand side: trade frictions have limited impact

Overall stable growth

Futures Daily reporter learned that polyester is the most important downstream area of ethylene glycol. At present, more than 87% of ethylene glycol is used in polyester production, and polyester is the highest proportion of products. Due to the incomparable advantages of natural fibers with low cost and high spinnability, polyester is widely used in garment and textile industry, and the related demand is growing continuously.

According to the person in charge of Sinopec Economic and Technological Research Institute, since 1950, the consumption of natural fibers has been relatively stable, while the consumption of synthetic fibers has shown a greater growth rate. The United Nations expects the global population to grow to 7.76 billion by 2020. Thus, the per capita consumption of synthetic fibers will exceed 1.35 kilograms, and the total consumption will break through the 100 million tons mark for the first time. At present, polyester has accounted for more than 75% of the total consumption of synthetic fibers. It can be said that polyester is not only the main source of the growth of synthetic fibers, but also an important force to support the development of ethylene glycol industry.

Specifically, from 2016 to 2018, China’s apparent demand for ethylene glycol has maintained a steady growth trend. Yang Qianli, general manager of Shanghai Yijing Industrial Co., Ltd., introduced that in 2018, China’s apparent demand for ethylene glycol was 16.6 million tons, of which 9.95 million tons were imported. By comparison, China’s domestic output was only 6.65 million tons, and its self-sufficiency rate just reached 40%, still at a low level. From this point of view, there is still room for growth in domestic demand for ethylene glycol.

At the forum, Ma Xiumei, deputy general manager of Hengli Refining and Chemical Company, also explained to the participants the impact of trade friction on downstream demand for ethylene glycol. “In the fourth quarter of 2018, due to the prevailing early delivery by export enterprises, China’s textile and apparel exports were not significantly affected by the U.S. tax increase measures, but since 2019, the amount of textile exports to the U.S. has declined significantly.” According to the data released by the General Administration of Customs of China, from January to May 2019, chemical fibers, yarns, carpets and non-woven fabrics in textile exports to the United States declined in varying degrees. However, people concerned said that because the scale of China’s textile industry and the matching capacity of the industrial chain have certain irreplaceability in a short time, Chinese enterprises can also circumvent the switch tax through indirect export. In conclusion, the development of polyester industry has provided support for the demand of ethylene glycol. Although trade friction may have adverse effects on the export of downstream products of ethylene glycol, it will not change the overall growth trend of demand side.

B Supply side: Increased competition in imported products with newly added capacity

According to reports, during the 12th Five-Year Plan period, the domestic petrochemical industry continued to develop rapidly, which was manifested in the following three aspects: firstly, the new naphtha ethylene unit was put into operation continuously, and the supporting ethylene glycol unit was relatively large; secondly, the domestic methanol olefin project and the outsourced ethylene ethylene ethylene glycol unit were successively constructed. Third, more than 60 new coal/syngas ethylene glycol plants are under construction and planned to be built in China, with capacity approaching 30 million tons, of which 6 million tons are added around 2020, and most of the remaining projects are planned to be put into operation before 2025.

In 2018, a total of 2120,000 tons of ethylene glycol production capacity were added in the whole year, including CNOOC Huizhou project with an annual capacity of 400,000 tons and Yangquan project with an annual capacity of 200,000 tons. In addition to CNOOC Huizhou project using petroleum technology, other projects are using coal technology. The centralized operation of the new plant led to a 25.57% increase in ethylene glycol production capacity in a year, which reduced market expectations for the price of ethylene glycol.

Yang Qianli said that although no new devices were put into operation in China in the first half of 2019, the total output continued to grow. “In the first half of 2019, the output of coal-based ethylene glycol was 1512,000 tons, an increase of 52% over the first half of 2018, and that of petroleum-based ethylene glycol (including MTO) was 2.465 million tons, an increase of 17.9% over the first half of 2018.” In addition, at present, the total production capacity of ethylene glycol projects under construction and proposed in China is close to 30 million tons. The pressure on the price of ethylene glycol caused by the expansion of production is bound to remain for some time.

Overseas, the period from 2019 to 2023 is a period of rapid expansion of global production capacity. During this period, SASOL, MEGlobal in the United States, Kayang Petrochemical and Jubail Petrochemical in Saudi Arabia and other enterprises have plans to put into operation. The head of Sinopec Economic and Technological Research Institute said that in the next five years, 5.29 million tons of new ethylene glycol production capacity are expected to be added abroad, with an average annual increase of about 1 million tons. North America and the Middle East are areas with relatively concentrated production capacity, and their installations are dominated by the traditional petroleum system.

According to the person in charge, ethylene glycol from North America and the Middle East has a greater competitive advantage in production, thanks to the breakthrough in shale gas production technology and the proximity to oil producing areas. At present, domestic production can not meet the demand, and the rapid growth of ethylene glycol imports leads to more fierce price competition in the domestic market. According to statistics, in 2018, China’s total import of ethylene glycol was 9.8 million tons, an increase of 1.08 million tons over the previous year, an increase of 12.4% over the previous year. In the case of little change in the demand side, the domestic multi-unit centralized production, and then superimposed imports continued to increase, the supply side significantly released, so that the price of ethylene glycol pressure.

C Coal to Ethylene Glycol: Great Prospects

The characteristics of “more coal and less oil” determine that China must expand the application of coal in chemical industry. In the process of expanding production of ethylene glycol since 2018, it is the large-scale production of coal-based ethylene glycol plant that makes people’s eyes bright. According to statistics, in 2018, the production capacity of coal-based ethylene glycol increased by 1.72 million tons per year, accounting for 81.13% of the total annual production capacity. As of April 2019, the actual production capacity of coal-based ethylene glycol has reached 432,000 tons per year. In addition, production capacity of more than 7 million tons per year is expected to be put into operation by the end of 2022. Yang Qianli estimates that in three years’time, the capacity of domestic coal-based ethylene glycol plant will reach 10 million tons per year, plus petroleum-based ethylene glycol, which can meet 70-80% of domestic demand. At that time, the external dependence of China’s ethylene glycol market will be greatly reduced.

With the continuous optimization of related production technology, the quality of coal-based ethylene glycol has reached the standard requirements of downstream production enterprises. It has been widely used in the production of polyester, bottle flakes, staple fibers and filaments, and the blending ratio has been improved. Yang Qianli said that when polyester enterprises decide the blending ratio of coal to ethylene glycol, they no longer only consider the technical requirements, but also consider the production scale, market price, process equipment, use time, marketing strategy and other aspects comprehensively.

However, some market participants believe that at present, the blending ratio of coal to ethylene glycol in most enterprises is only 20%-30%. The unstable supply is the main reason that restricts its larger-scale application. Polyester enterprises need stable supply to ensure production and sales, but due to the depressed market price from 2019 to now, the start-up rate of coal-based ethylene glycol plant has not reached 60% for a long time, so it can not guarantee the sustainability and stability of supply. Many experts at the meeting agreed that large-scale and high-load operation of coal-based ethylene glycol plant is an important prerequisite to support its future development.

In view of the current low price and fierce competition in the market, Yang Qianli put forward his own thoughts and suggestions from the raw materials and products of coal-based glycol. On the raw material side, “cost reduction is the king of survival”. Even if the oil price rises to $70 per barrel, the production cost of ethylene to ethylene glycol is still lower than that of coal. Therefore, relevant enterprises need to further control the cost of coal-to-ethylene glycol through process innovation and fine management. Futures Daily reporter learned that in recent years, there have been some new changes in the raw material end, some enterprises began to try to use waste gas or coke oven tail gas as raw materials to produce ethylene glycol. There are still some problems to be solved in gas volume, gas pressure stability and purity of tail gas in this technical route. But if it can pass long-term stability certification, it will help to reduce the production cost of subsequent coal-based ethylene glycol plant, and then increase the competitiveness of this technical route.

At the product end, the coal-to-ethylene glycol unit equipped with methanol production line shows greater flexibility. Such devices can flexibly adjust the product structure according to market conditions. For example, when the price of ethylene glycol is low, it can reduce the production of ethylene glycol and increase the methanol load. At present, Xinhang and Yigao units have such capabilities, and many follow-up units have been deployed and designed in the period of investment and technical demonstration. In addition, “PJ-EG polygeneration technology” is also developing. If a set of devices can produce products of multiple varieties and sequences according to the situation, the ability of coal-based ethylene glycol enterprises to resist price fluctuations and adapt to market changes will be greatly improved. Yang Qianli concluded that “coal-based ethylene glycol has made outstanding contributions in alleviating supply constraints, reducing production costs and enhancing the competitiveness of domestic polyester fiber enterprises, and its prospects are bound to coexist with challenges and opportunities. It is believed that the coal chemical industry can prove that the coal-to-ethylene glycol route is a “road to go, to go well”.

Price Trend

Business associations: maleic anhydride market rose in July as a whole

According to data from business associations, the average price of maleic anhydride offered by the end of July was 6987.50 yuan/ton (including taxes), with a monthly increase or decrease of 5.87%.

On July 31, the maleic anhydride commodity index was 65.82, down 0.12 points from yesterday, down 46.78% from the cyclical peak of 123.67 points (2017-12-26), and up 17.18% from the lowest point of 56.17 on February 16, 2016. (Note: Period refers to 2011-09-01 to date)

II. Analysis of Influencing Factors

Products: In July, maleic anhydride market continued to rise first and then fall. July crude oil market shocks, downstream resin factories due to environmental factors and high temperature factors, low start-up rate, market continued to weaken, the demand for maleic anhydride is general. In July, most of the major domestic maleic anhydride plants operated normally, and the domestic supply of maleic anhydride was sufficient. Downstream enterprises and traders have low inquiry intentions, mainly to maintain on-demand procurement, and market transactions are general.

Industry chain: According to the monitoring of business associations, the hydrogenated benzene market rose 8% monthly this month due to the double positive effects of the rise in the external market of pure benzene and the rise in the listing price of pure benzene in Sinopec. The downstream resin factory starts because of environmental protection and high temperature factors, low start-up rate and weak market sentiment. Benzene law deficit situation aggravated, this month due to the sharp decline in pure benzene port inventory and import volume, the United States pure benzene supply gap, domestic pure benzene prices rose by more than 8%. The price of n-butane is still hovering at a low price, the market is well supplied, and the downstream is still in the off-season. In August, maleic anhydride is expected to continue downward trend.

Industry: According to the price monitoring of business associations, in July 2019, 43 kinds of commodities rose annually in the chemical sector, of which 23 commodities increased by more than 5% accounted for 27.4% of the monitored commodities in the sector; the top three commodities were yellow phosphorus (47.32%), phosphoric acid (26.94%) and hydrochloric acid (23.33%). There are 33 kinds of commodities with a decline of more than 5%, accounting for 11.9% of the monitored commodities in this sector. The products with the first three declines are trichloromethane (-16.39%), sulfur (-13.71%) and bromine (-9.66%). This month’s average rise and fall was 2.41%.

3. Future Market Forecast

Analysts of maleic anhydride products from Business Society Chemical Branch believe that at present, the domestic maleic anhydride market is expected to have a downward trend in August.

Oil prices plunged more than 7% on Thursday to a seven-week low after President Trump said he would impose a 10% tariff on $300 billion worth of Chinese imports from September 1.

The protracted trade war between the world’s two largest economies has raised concerns about oil demand.

Brent crude oil futures plunged $4.55, or 6.99%, to close at $60.50 a barrel, once falling to $60.02, the lowest level since June 13. Thursday saw the biggest one-day percentage decline since February 2016.

U.S. crude oil futures plunged $4.63, or 7.9%, to close at $53.95 a barrel, after falling to the lowest level since June 19 at $53.59. Thursday recorded the largest percentage decline since February 2015.

“Oil prices have fallen sharply today, frustrated by the Federal Reserve’s policy of easing and the announcement by President Trump of tariffs on Chinese imports,” said John Kilduff, partner in Again Capital Management.

“The U.S. -China trade war has seriously damaged the prospects for energy demand, which only exacerbates these concerns,” he said. “The trade war is clearly far from over.”

Oil prices fell earlier and continued to respond to the Federal Reserve’s policy decision on Wednesday. The Federal Reserve cut rates as expected, but Fed Chairman Powell said the rate cut may not be the beginning of a series of rate cuts to help the economy withstand the risk of global economic weakness, which reversed market sentiment.

The Fed’s information did not match market expectations, triggering a rebound in the dollar. The dollar index rose to a 26-month high of 98.93 on Thursday. The strength of the dollar has made dollar-denominated oil more expensive for holders of other currencies. After Trump commented on tariffs, the dollar index moved below flat.

The bearish momentum of crude oil prices is likely to continue after Thursday’s fall below key support levels, said Edward Moya, senior market analyst at OANDA.

Oil prices fell on Thursday, although U.S. inventories fell more than expected, and the Organization of Petroleum Exporting Countries (OPEC) cut production in July, which is usually a profit-driven factor in oil prices.

Manufacturing activity in the United States slowed to a nearly three-year low in July, and new factory orders rebounded slightly, suffering from the negative impact of the trade war between the United States and China.

Other data released on Thursday showed that the number of new jobless claims rose last week and construction spending fell in June as private construction investment fell to its lowest level in a year and a half.

Data released Thursday showed that overall U.S. oil demand fell by 98,000 barrels a day in May to 20.26 million barrels a day.

Price Trend

According to the data of business associations, the price trend of cryolite market was temporarily stable in July, with the average price stabilizing at about 6333.33 yuan/ton in the month, down 2.99% from the same period last year.

II. Market Analysis

Products: Cryolite manufacturers quoted stable prices this month, as of July 31, Zibo Kunyu industry and trade cryolite quoted 6500 yuan/ton; Changshu Hongjiafu Co., Ltd. cryolite quoted 7300 yuan/ton; Jiaozuo City commercial cryolite quoted 7000 yuan/ton; Zhengzhou Tianrui crystal technology cryolite quoted 6500 yuan/ton; Shandong Botao Group Co., Ltd. The price of cryolite is 7000 yuan/ton.

Industry chain: The domestic market price of fluorite in the upstream of July is shaking. By the end of the month, the average price of fluorite in China is about 312.50 yuan/ton, which is more stable than that at the beginning of the month. Recently, the fluorite plant has started to work normally. On the whole, the supply of fluorite is sufficient, but the fluorite market is greatly affected by environmental protection. The supply of fluorite in the field is normal. The price of fluorite from different factories has fallen, and the price trend of fluorite market is temporarily stable.

Industry: According to the price monitoring of business associations, in July 2019, 43 kinds of commodities rose annually in the chemical sector, of which 23 commodities increased by more than 5% accounted for 27.4% of the monitored commodities in the sector; the top three commodities were yellow phosphorus (47.32%), phosphoric acid (26.94%) and hydrochloric acid (23.33%). There are 33 kinds of commodities with a decline of more than 5%, accounting for 11.9% of the monitored commodities in this sector. The products with the first three declines are trichloromethane (-16.39%), sulfur (-13.71%) and bromine (-9.66%). This month’s average rise and fall was 2.41%.

3. Future Market Forecast

Analysts of cryolite products from business associations believe that: at present, the plant is running normally, the factory stock is sufficient and pressure-free, the ex-factory quotation is temporarily stable, the upstream has little impact on cryolite, and the market of cryolite is expected to run steadily in August.