What is the market outlook for ethylene glycol?

The competition is fierce, with various factions vying for power. Go and search on Baidu; there are countless people who do promotion work. And there are so many brands of ethylene glycol. Add to this the influx of imported ethylene glycol, and the intensity of competition can be imagined. Although market share still exists at present, judging from the rate of development. The prospects won’t be that good.

The market prospects are not optimistic; deep processing might be an option.

Don’t listen to them. I conducted market research earlier, and it seems that there is a significant shortage of ethylene glycol in our country (the exact figures cannot be disclosed). In fact, in some regions of the Middle East, oil is very cheap; they use oil to produce ethylene, which is then sold to China. Their costs are so low that it’s impossible to compete with them, as a result of which the domestic supply of ethylene glycol has reached saturation.

The fate of coal-based ethylene glycol is the same as that of coal-based methanol

The statement on the 4th floor is incorrect; let me correct it. In China, ethylene glycol is primarily produced through petroleum-based methods (with the exception of Tongliao Jinmei, which produces 200,000 tons of coal-based ethylene glycol per year), and its cost is roughly similar to that on the international market. Currently, the petrochemical industry in the Middle East is experiencing significant changes. The region primarily uses cheap natural gas resources to produce ethylene glycol, rather than the oil resources mentioned earlier; as a result, the cost of raw materials for production is lower than that using oil. By 2015, much of the domestic ethylene production capacity will be replaced by that from the Middle East! Although there is still a significant shortage of ethylene glycol in the domestic market, with over 5 million tons needing to be imported each year, China’s energy consumption structure is dominated by coal, and the production of ethylene glycol relies mainly on oil, which is also imported. Therefore, there is no advantage to producing ethylene glycol in China; it is better to import it directly.

Recently, the price of ethylene glycol has been 6,000 yuan per ton, and it’s basically at its lowest level now

Competition in the ethylene glycol industry is set to become increasingly fierce for the following reasons: 1. New production capacities are coming online, and these new facilities have advantages in terms of technology, scale, and raw material composition, which gives them a cost advantage. However, to gain share in the market, they must enter it at lower prices, thereby disrupting the overall structure of the industry； 2. There is a large gap in the domestic market, and this gap tends to widen as the economy develops. Although domestic production capacity and output of ethylene glycol have increased significantly, they still fail to keep up with the rapid growth in demand. Meanwhile, ethylene glycol produced via the ethane route in the Middle East has entered the market on a large scale, targeting Asia, especially the rapidly growing Chinese market; price wars are thus inevitable ； 3. With a breakthrough in domestic coal-based ethylene glycol technology having just been announced, many coal chemical enterprises have rushed into this field, claiming that it can replace or partially replace petrochemical products. Well, can replacing just ethylene glycol really achieve such a replacement? Isn’t that a bit overconfident? ? However, this trend is bound to intensify market competition in the coming years as coal-based ethylene glycol enters the market. Yet, the cost of coal-derived ethylene glycol does not offer any significant advantage over that of the petroleum-based route, let alone compared to the ethane-based route. 4. China’s textile industry is one of the end-user markets for ethylene glycol, and it is a very large such market. At the same time, this industry has a high degree of dependence on external factors, namely exports; therefore, whenever there are changes in the international market, the textile industry is among the first to be affected, in the most direct and rapid manner. These effects also quickly spread to the upstream raw material industry (ethylene glycol). The financial crisis in 2008 is a typical example of this. It can be said that China’s ethylene glycol industry is no longer as prosperous as it used to be after the financial crisis. Petrochemical giants, thanks to their integrated refining and production capabilities as well as their large-scale operations, are able to effectively manage risks and the rise in costs of raw materials. If necessary, they can pass on these risks to downstream customers by raising the prices of refined products or other monopolized raw materials. However, this is not possible for coal-based ethylene glycol production, as the price of the upstream raw material, coal, is determined by the coal industry itself, while the price of ethylene glycol at the downstream level is set by the petrochemical giants. When it comes to producing ethylene glycol from coal, one must be extremely cautious; it should not be launched recklessly, lest the investment go to waste, which would be a real problem, haha