As of July 2019, according to CCF statistics, the total production capacity of ethylene glycol was 10.705 million tons, of which coal-based ethylene glycol was 4.41 million tons and oil-based ethylene glycol was 6.295 million tons. In the first half of 2019, no new ethylene glycol plant will be put into operation. According to the current announced production capacity, the ethylene glycol plant with a petroleum extension of 100,000 tons/year will be put into operation at the end of July. The synthetic gas used in the plant is associated gas from oil fields, and the cost is low, so the corresponding cost of ethylene glycol production is also low. However, the capacity of the device is small and the impact on the supply side is limited.

　　But in the long run, starting from the end of the third quarter of 2019, new production capacity of ethylene glycol will be put into operation one after another, when the pressure on the supply side of ethylene glycol will gradually increase. And in the long run, the cost of adding new ethylene glycol plant will be lower in the future. Such as Mingtuo Group, Inner Mongolia Jianyuan, Meijin Energy (9.49-0.84%, Diagnosis Unit), Linxin Coal Coking and Guanghui Science and Technology Company's syngas ethylene glycol plant. The raw materials of syngas in the above plant are ore furnace tail gas, coke oven gas, tail gas and waste gas, which belong to the "waste gas" in the production of chemical industry chain. Therefore, the cost is very low. Using these "waste gas" to produce can obviously reduce the production cost of ethylene glycol products and enhance the overall profitability of the project.

　　In the long run, with the subsequent low-cost ethylene glycol plants coming into the market, the cost curve of ethylene glycol will move to the right, and the backward ethylene glycol plants higher than the marginal cost will gradually be eliminated, and the low-cost ethylene glycol plants will be retained. The current fluctuation pattern of ethylene glycol is due to the fact that the cost of ethylene glycol is still supported, but with the full commissioning of low-cost ethylene glycol plant, the price center of ethylene glycol will continue to move downward in the long run.

　　At present, the production capacity of coal-to-ethylene glycol accounts for 41.19% of the total production capacity of ethylene glycol. Generally speaking, due to the limitation of the chemical production chain of the oil-to-ethylene glycol plant, it is difficult to stop production and repair, while the coal-to-ethylene glycol plant is mostly connected to the chemical production chain, so the maintenance is more controllable. Since the second quarter of 2019, the decline of the start-up rate of coal-based ethylene glycol plant has led to the decline of the overall start-up rate of ethylene glycol. At present, the overall starting rate of ethylene glycol is 64.74%, the load of coal-based ethylene glycol is 50.79%, and that of oil-based ethylene glycol is 74.51%. Owing to the large number of ethylene glycol units and the dispersed production capacity, it is often difficult to achieve better results in the maintenance of ethylene glycol units.

　　The downstream of ethylene glycol and PTA are corresponding to polyester (PET). Generally speaking, it takes 0.33 tons to 0.34 tons of ethylene glycol and 0.85 tons to 0.86 tons of PTA to produce 1 ton of polyester. Recently, because of the high price of PTA, the production cost of downstream polyester enterprises has been put under great pressure. Therefore, downstream polyester enterprises are announcing production reduction plans one after another to force downstream PTA prices down by reducing demand.

　　Terminal demand has not improved, polyester inventory will gradually rebound. At present, PTA's internal price is 6475 yuan/ton. In terms of the price at the beginning of June, PTA's price has increased by 1000 yuan/ton. Today, Fuhaichuang 4.5 million tons per year PTA device has been opened for maintenance, and it is expected that PTA spot shortage in the near future. Because the price of PTA in upstream raw materials has risen too fast, the cost of terminal looms has increased sharply. At present, the load of Jiangsu and Zhejiang looms has dropped from 77% to 75.5%. For polyester enterprises, they are facing a sluggish demand, but the cost of PTA raw materials is high, so there will be a reservoir expectation for subsequent polyester.

　　Polyester prices are beginning to fall, and profits may fall. Prior to this, the price of raw materials PTA soared recently, as well as the low inventory status of polyester itself, polyester prices have also been rising. However, due to the lack of improvement in terminal demand, the price of polyester has begun to decline, with the prices of polyester chips and bottles falling to 7800 yuan/ton and 7775 yuan/ton respectively, and the prices of POY, DTY and FDY of polyester filaments falling to 8650 yuan/ton, 10050 yuan/ton and 8900 yuan/ton respectively. Therefore, if the upstream PTA price is difficult to fall, polyester profits will tend to decline, and the scale of polyester production reduction may further expand.

　　The polyester factory began to announce the production reduction plan, which was a negative impact on the demand side of ethylene glycol. Based on the above analysis, we can see that the current polyester enterprises are facing the situation of strong cost and weak demand. Therefore, in this case, some polyester enterprises have chosen to reduce production, and the scale of reduction has a further trend of expansion. The announcement of the polyester plant production reduction plan will suppress the demand side of ethylene glycol in the short term.

　　As of July 4, the stock of ethylene glycol in East China's main port was 1182,000 tons, which was at an all-time high. In the early stage, due to the strong production and marketing of downstream polyester and weather reasons, ships arriving at port were delayed. As a result, the inventory of Ethylene Glycol Port has been declining due to the fact that the arrival goods are not up to expectations and the downstream demand. However, with the successive arrivals of ships and the recent weakening of downstream polyester demand, the storage of ethylene glycol port stocks may continue to accumulate. In the short term, the high pressure of ethylene glycol port stocks is difficult to resolve.

　　Today, Ethylene glycol has fallen to a halt due to the test run of a 750,000-ton new production capacity in Malaysia. However, at present, the main import areas of Ethylene glycol in China are Saudi Arabia, Canada, Kuwait and so on. The amount of Ethylene glycol imported from Malaysia is very small. From January to May 2019, China imported 449,000 tons of ethylene glycol from Malaysia, accounting for 1.01% of the total imports. Therefore, Malaysia's commissioning of this unit has little effect on the supply of ethylene glycol in China.

　　Looking ahead to the fundamentals of ethylene glycol at present, from the supply side, the greatest pressure it faces comes from the commissioning of the ethylene glycol unit which extended oil production by 100,000 tons/year at the end of July. The production capacity of the unit is small, but the cost is low. On the demand side, the downstream polyester enterprises have a trend of further expanding the scale of production reduction, and the demand side of ethylene glycol is under pressure. On the inventory side, with the downstream demand shrinking and the delayed arrival of ships, the inventory of ethylene glycol port may rise again.

　　However, at present, because of the recent fluctuation in the range of ethylene glycol, its support lies in the cost of ethylene glycol production, so further downward price of ethylene glycol futures needs large-scale low-cost ethylene glycol production capacity. As far as the current production capacity is concerned, this condition is not yet available. Therefore, in the follow-up, ethylene glycol does not have the momentum to continue to fall sharply, but its recent weak fundamentals determine that it will operate weakly.