1、 Trend analysis
As shown in the figure above, in the first half of 2023, China’s Diethylene glycol was mainly guided by the macro news and its own fundamentals, and the overall trend showed an inverted “V” trend. In the first half of 2023, the average price in the East China market was 6141 yuan/ton, up 23.09% year on year. At the end of the Spring Festival, as the port inventory continued to be low, boosting the enthusiasm of the market, the market price of Diethylene glycol soared all the way, and the high point of the market price in East China exceeded 8000 yuan/ton. However, the downstream follow-up sentiment slowed down, and the Diethylene glycol market entered a downward phase when there was a certain amount of cargo replenishment at the port. By June, the market’s decline was amplified and gradually returned to the level before the rise. After a deep drop in prices, bearish sentiment had dissipated to some extent, and the market returned to fundamentals driven.
2、 Market analysis
In the first ten days of January April, the Diethylene glycol market soared all the way up. At this stage, Diethylene glycol’s own fundamental favorable factors dominated the market. The supply and demand were stronger and the macro aspects were boosted. The market started a rising model. The number of imports to Hong Kong is limited, and the inventory of the main port continues to be destocked, and the minimum inventory will reach around 15000 tons. The supply continues to be in short supply, and the demand also performs well. The two together support the market focus to continue to rise. On April 11, the price of Diethylene glycol rose to a historical high of 8110 yuan/ton in recent years.
In the middle of April to the end of June, the downward channel of Diethylene glycol was opened. After the price of Diethylene glycol rose to a new high in mid April, the market became bearish. Some market participants took profits, and the market began to weaken. Although the supply side continued to support the market, the demand side performance gradually weakened. The downstream follow-up was weak, and the market confidence was insufficient. Diethylene glycol gradually entered the downward channel. Since mid June, the market’s decline has slowed down, and the fundamental performance has shown weakness. There is a lack of positive news support, and the market is weak and volatile.
3、 Forecast for the second half of the year
In the second half of 2023, the supply side of Diethylene glycol has limited support, the price may be adjusted at a low level, and the upward market needs to be boosted by demand. In terms of supply, the maintenance of large domestic devices has basically ended in the first half of the year, and the opening meeting of the devices has improved in the second half. However, due to the poor performance of ethylene glycol, it is difficult to have a significant overall increase in construction. It is expected that domestic supply will increase in quantity. At the same time, as foreign devices recover, there is also a possibility of a small increase in imports. Therefore, in the second half of the year, port inventory may slowly start accumulating, and the supply side provides market support generally.
In terms of demand, starting from mid August, the traditional peak season of the downstream unsaturated resin market has gradually entered, especially in the “Golden Nine Silver Ten” stage. There is a certain expectation of incremental growth in the demand side, which has a corresponding positive boost for the market. However, the overall recovery of the terminal market still needs to be observed. In addition, the overall environment of national economic development also has an important impact on the adjustment of market mentality.
To sum up, the domestic Diethylene glycol market may be slightly consolidated in the second half of the year, and the changes in the demand side will become the main driving force for the price rise. It is necessary to pay attention to the macro, device operation and changes in market mentality.
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