The market calls for accelerating the listing of domestic ethylene glycol futures
the polyester industry chain is in a downturn, and ethylene glycol is difficult to survive.
with the "rapid decline" of crude oil prices, the inventory of related products in the polyester industry chain has depreciated seriously, and enterprises have fallen into the quagmire of cost collapse. On the supply side, the pace of capacity expansion continues, and the problem of overcapacity is prominent; In terms of demand, domestic and foreign demand is weak, and the terminal textile industry continues to be depressed
"polyester prices in all links are currently reported at 6000-7700 yuan/ton, down 2000 yuan/ton from the peak in May last year, and at this position, it has been sideways for more than a month, and the rebound is weak. Some polyester enterprises are facing increased cost pressure and serious production losses." Dongwu futures analyst Wang Guangqian introduced
during a recent visit to the polyester industry chain market, it was found that the business conditions of polyester enterprises were differentiated: staple fiber enterprises were in good condition, filament enterprises were not satisfactory, and bottle chip enterprises were not very optimistic. In the past year, large-scale polyester enterprises such as Hongjian group and Minghui chemical fiber have successively declared bankruptcy, reflecting the difficult survival situation of the polyester industry
"at present, the polyester industry is still overcapacity, especially in the field of bottle chips, many new devices are still put into production. In addition, due to the impact of foreign anti-dumping, the export difficulty is gradually increasing, and the rise of textile industry in Southeast Asian countries also has a certain impact on China." Said qimingzhi, an analyst at China finance futures
in this context, in addition to the PTA that has been "falling endlessly" before, the consistently strong ethylene glycol (MEG) is also difficult to survive. It is understood that at present, nearly 90% of MEG in China is used to synthesize polyester with PTA, and the operation of polyester enterprises is bound to greatly affect the operation of MEG prices
it was learned that as of February 15, the PTA price in the spot market closed at 4300 yuan/ton and the MEG price closed at 4900 yuan/ton, down 1100 yuan/ton and 3200 yuan/ton respectively from the peak in May last year
in the polyester industry chain, the overcapacity of PTA is obvious to all, while the supply and demand of MEG is different from PTA. It is understood that at present, PTA production and operation enterprises are mostly private enterprises, and capacity expansion is relatively easy. The upstream raw material of MEG is ethylene, and its domestic supply main body is "two barrels of oil". Subject to the excess refining capacity, the pace of domestic MEG capacity expansion is relatively slow
"this gives the supplier a greater say in pricing, while the polyester enterprise, as the demander, is in a passive position." However, Wang Guangqian also said that Meg's relative strength in the polyester industrial chain can only be phased, because the downstream polyester terminal demand is difficult to improve significantly, Meg's own supply is still in the cycle of capacity expansion, and the price will not be separated from the overall environment of the whole industrial chain for too long
similarly, in the view of wangtengjiao, an analyst of business society, MEG is difficult to be alone, and the downturn in the polyester industry will soon be transmitted to MEG
large price fluctuations pricing look at foreign faces
whether in the short term or in the long term, a significant feature of MEG is large price fluctuations
from the data of 2015, we can see that the average spot price of PTA is 4623 yuan/ton, the lowest value is 4090 yuan/ton, the highest value is 5300 yuan/ton, and the fluctuation range of extreme relative average price is 26.2%. The average spot price of MEG is 5994 yuan/ton, the lowest is 4163 yuan/ton, the highest is 8025 yuan/ton, and the extreme relative average price fluctuation range reaches 65.4%
it was learned in the interview that Meg's sharp rise and fall had something to do with its high dependence on imports, strong financial attributes and more speculative demand
according to Yang Jing, an analyst at China Merchants futures, China's MEG import dependence has been high, which remained at the level of 70% - 80% before 2012. In recent years, with the continuous production of domestic coal based MEG units, the import dependence has decreased slightly
however, due to the poor production process and quality stability, the coal based MEG project, which has developed rapidly in the past two years, is also facing problems such as insufficient operation and limited downstream application. The domestic MEG supply has to rely on imports for a long time to meet. In 2015, China's MEG output was 4.6 million tons, while the import volume was as high as 8.65 million tons, and the import dependence remained at a high level near 70%
China is the largest polyester producer in the world, and about 90% of MEG is used to produce polyester. Therefore, China has become the largest MEG consumer in the world. However, due to the high dependence on domestic MEG imports and the lack of a reasonable price with high recognition in the domestic MEG market, domestic enterprises have been weak in pricing discourse
according to Yang Jing, in general, the price of MEG internationally is determined by the price of contract goods. The sales price of contract goods of international MEG manufacturers is adjusted once a month, and the reference standard is the average selling price of MEG in the spot market last month. Domestic MEG pricing is a contract advocacy price given by Sinopec system at the beginning of the month, and a contract settlement price at the end of the month, which is modified according to the spot price of the month
"due to the lack of a strong guiding price in the domestic MEG market, Guo Xinrong, Secretary General of the titanium dioxide industry branch of China Paint Industry Association, once said that since the second half of 2015, paper goods have frequently defaulted, while the number of participants in the electronic trading market is too small, resulting in sharp price fluctuations, which does not have a strong ◆ with an alarm prompt, the image of the alarm device is solved, and the graphic interpretation is representative." Yang Jing believes that in the absence of clear price constraints and guidelines in China, foreign suppliers have more say in pricing
in addition to the "face" of the international market, the domestic MEG market is also affected by the impact of exchange rate changes on the arrival schedule of dollar goods, and more importantly, there is the risk of default
it is understood that in paper goods trading, the seller will generally charge the buyer part of the margin first, but MEG price fluctuates greatly. Once there is a sharp rise, the seller is prone to default. If the seller fails to deliver goods on time or does not deliver goods, the margin will be returned, otherwise, there is a risk of default of the buyer
"at present, there is no trading market with strong binding force in MEG market. Once there is an extreme market, the risk of default will be unavoidable." Yang Jing said
the market is looking forward to the listing of ethylene glycol futures. According to the interview, at present, the application and promotion of coal MEG in polyester is still not smooth. The mainstream polyester enterprises can also realize the automatic verification and calibration of load units when replacing sensors with new software for coal MEG. For polyester factories, Meg's external dependence is still very high, and there is no possibility of improvement in the short term. MEG enterprises, especially coal based MEG enterprises newly put into operation, urgently need hedging tools to deal with the risk of MEG price fluctuations, while large MEG traders are also facing risk exposure. Downstream enterprises are also very passive in procurement due to the lack of hedging tools and asymmetric information
in this context, the market calls for the launch of MEG futures as soon as possible
Qi Mingzhi told that at present, when polyester enterprises purchase raw materials, the proportion of contract goods of PTA is quite high, while the proportion of spot goods of MEG is very high. Considering the liquid chemical characteristics of MEG and its high dependence on imports, the price fluctuation of MEG is also greater than that of PTA, which brings greater risks to polyester enterprises in purchasing raw materials. "The most prominent function of the futures market is to provide producers and operators with tools to avoid price risks. If MEG futures can be successfully listed, it will effectively alleviate the operational risks of polyester and MEG production enterprises."
in fact, in recent industrial chain surveys, the market has heard a lot about the listing of MEG futures
"At present, there are few MEG electronic discs, and some of them still have problems such as non-standard system and opaque operation information. If MEG futures are listed, this disadvantage can be effectively avoided, and more credit guarantee can be provided to promote the marketization of MEG price trend.
traders and enterprises can hedge through the futures market, avoid the risks caused by price fluctuations in spot transactions, lock in production and operation costs, and achieve expected profits Run. " Wang Tengjiao said
"in addition, the price formed in the futures market can truly reflect the supply and demand situation and provide reference prices for the spot market, which is conducive to forming a price benchmark with guiding significance and binding effect on foreign suppliers and improving the MEG pricing power of domestic market players." Yang Jing said that as an important link in the polyester industry chain, the listing of MEG futures will further improve the variety sequence of the industry chain, reduce the risk exposure of the industry chain, and allow relevant market participants to find and trade "reasonable prices"
Wang Shu, head of MEG sales of Zhejiang Qiancheng Petrochemical Co., Ltd., admitted that Meg futures may change the pattern of the entire polyester market, and the company hopes that Meg futures can be listed as soon as possible. In his view, polyester industry households can only use PTA futures for hedging at present, locking in some raw material costs, resulting in their low enthusiasm to participate in futures. After MEG futures are listed, they can cooperate with PTA hedging operations and enrich strategies
"from the perspective of trade links, since there is no MEG futures, far month trading mostly adopts the paper goods method, and default and repudiation events occur frequently. The futures market can eliminate this risk, and the operation modes and methods of spot traders are more diverse, and the combination of futures and cash can also create more opportunities." Wang Shu believes that more importantly, the listing of MEG futures can also expand the participation group from industrial households to the capital market, which is more conducive to the development of MEG market
"brothers" work together to speed up the internationalization process of polyester industry
PTA and MEG are the two major raw materials for polyester production. In the escort of the polyester industrial chain, the two "brothers" of futures also need to work together
pta futures has played a good role in price discovery and hedging since its listing on December 18, 2006, and has played an obvious benchmark role in the whole polyester industry chain. At present, the whole polyester industry chain, whether buying raw materials or selling finished products, refers to PTA futures prices
however, compared with PTA, MEG has a greater risk of price fluctuation. In the process of production and operation, downstream polyester enterprises only use PTA, a futures variety, as a hedging tool, which makes the market feel inconvenient to "walk on one leg"
"without MEG futures hedging, polyester enterprises have always been difficult to lock in the long-term MEG raw material costs, especially in the past two years, MEG prices have fallen sharply with oil prices, and the MEG raw material inventory of polyester enterprises has been seriously depreciated." Wang Guangqian said
in the view of CAI Yali, an analyst of Zhongyuan futures, MEG futures can enrich the futures variety sequence of the polyester industry chain, provide more complete hedging tools for polyester upstream and downstream enterprises, and enrich hedging strategies. "Enterprises can not only buy or sell PTA and MEG separately for hedging business, but also hedge between PTA and MEG."
"for polyester enterprises, with MEG futures, the hedging mode will be richer, and the risk of raw material cost will be fully covered." Wang Shu also believes that in order to better realize the function of the futures service industry, it is very necessary to improve the futures variety sequence of the polyester industry chain
Cai Yali told that from the perspective of production relations, PTA and MEG are complementary. As polyester enterprises have the same purchase demand for both, their prices have been rising and falling for most of the time, which can be described as sharing weal and woe. However, due to the different supply side faced by the two, sometimes the prices will go their separate ways. "Therefore, the hedging between the two should take more consideration of the supply side factors, and it is best to buy the strong and sell the weak according to the supply side differences. For polyester factories, they can also choose relatively strong raw materials."
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