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Ethane shortage prevents the Middle East from building new ethylene glycol plants: The Middle East is a major global supplier of ethylene glycol, with its exports accounting for 29% of global demand. Currently, ethane resources are insufficient. According to OPEC, the annual growth rate of OPEC’s NGL production is only 100,000 barrels per day; accordingly, the growth rate of ethane production is less than 50,000 barrels per day, which is not sufficient to meet the raw material needs for new ethane-ethylene-ethylene glycol production facilities. Heavy raw materials do not offer cost advantages in the Middle East, and it is expected that ethylene glycol production capacity there will remain unchanged in the future. U.S. ethylene glycol capacity is a one-time shock: The 2.9 million tons of ethylene glycol under construction in the U.S. will bring in effective production capacity by the end of 2018 and mid-2019 respectively. According to EIA projections, by the end of 2018, the supply and demand balance for ethane feedstock will reach 1.8 million barrels per day, with a ratio to propane production approaching the historical high of 1.4. We believe this means that the rapid growth of ethane is coming to an end; starting in 2019, the growth rate of ethane will return to normal. Our estimates suggest an annual increase of 100,000 barrels per day. Although this is a high figure compared to the Middle East, it is not sufficient to support a significant expansion of ethane cracking plants. Therefore, we believe that the substantial expansion of ethylene glycol production facilities in the United States represents a one-time phenomenon, with limited long-term growth potential, and it will not enable the displacement of ethylene glycol plants that use costly naphtha as raw material. China’s coal-based ethylene glycol has cost advantages: It relies on China’s abundant coal resources, and its current cost is lower than that of ethylene-based ethylene glycol produced domestically. According to calculations, with current coal prices of around 600 yuan, the cost per ton of ethylene glycol produced from syngas at a capacity of 50,000 tons is between 4,500 and 4,800 yuan. For ethylene-based ethylene glycol, the cost of just the raw material ethylene is nearly 5,000 yuan. With increased production capacity, leading domestic companies can achieve costs of 4,000–4,300 yuan, offering a significant cost advantage. The global supply and demand situation for ethylene glycol is expected to remain favorable in the coming years: The World Bank predicts that the global economic growth rate will increase gradually over the next few years, which means that the demand for ethylene glycol will also rise steadily. Our estimates show that the compound growth rate of demand for ethylene glycol will be 4.9% over the next three years, while the compound growth rate of supply will be 5.1%. The operating rate will remain above 85%, indicating a favorable supply situation for ethylene glycol on a global scale. Crude oil costs determine the long-term price level of ethylene glycol: Ethylene glycol produced via petroleum-based methods has its cost determined by marginal costs, and this price also fluctuates with oil prices. In the first half of the year, Brent crude oil prices remained in the range of $45–$50 per barrel. Assuming that oil prices will remain stable going forward, we estimate that the price of ethylene glycol this year will fluctuate between 6,000 and 7,000 yuan per ton. At an average price of 6,500 yuan per ton, this implies a profit of 800 yuan per ton for ethylene glycol produced from coal.