With the Sadara project ethylene glycol ether plant put into operation in June, the pace of Saudi butyl ether into the Chinese market is approaching. Saudi board with its low cost advantage and close geographical advantages can be described as unprecedented. And for a long time China’s ethylene glycol butyl ether market by Europe and the United States ocean cargo, Korean goods and horse oil supply, 2016, the product imports are still about 78% dependence. Saudi butyl ether 9 – October is about to enter the Chinese market, the domestic ethylene glycol butyl ether market will face a new round of reshuffle!
China’s domestic market share of low production to enhance the slow
According to statistics, China’s total production capacity of ethylene glycol butyl ether in 90,000 tons / year, the production plant has two, respectively, Jiangsu Yida Chemical 2007 in Jilin production capacity of 10,000 tons / year capacity and Denner in 2009 Year in Nanjing put into operation 70,000 tons / year production plant. 2011 Denar days sound expansion capacity of 20,000 tons / year later, nearly 6 years capacity has remained stable. And through incomplete statistics, in recent years, China’s total output of ethylene glycol butyl ether has been low, due to a large number of low-cost imports of goods on the market continued to impact, the overall improvement of the domestic factory operating rate is slow. The failure of the tones in June 2015 resulted in a significant reduction in production. To 2016 China’s butyl ether production increased significantly, the average annual operating rate of 66%, production of about 59,000 tons.
According to a rough estimate, from January to August 2017 China’s ethylene glycol butyl ether production of 35,000 tons, down 6.17% year on year. The main reason is that 2017 environmental protection policy continued pressure, downstream users operating rate is difficult to upgrade, ethylene glycol butyl ether apparent demand has decreased. 2017 in January-August domestic ethylene glycol butyl ether average operating rate of 53%.
The increase in imports is limited
A, monthly total imports
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In 2016, China’s ethylene glycol butyl ether imports totaled 15,388 tons, of which January, March and December imports more, respectively, 18,000 tons, 16,000 tons and 18,000 tons. The total imports of ethylene glycol butyl ether from January to July of 2017 were 91,000 tonnes, up slightly by 0.22% from the same period last year. Which in February, March, May imports more, are more than 14,000 tons, but compared to 2016 single month significantly reduced imports.
B, the proportion of countries of origin of imports
By collecting 2016-2017 ethylene glycol butyl ether imports from the country of origin imports, we can see that South Korea, the United States, Malaysia is still the top three imports, 2016 South Korea accounted for 42% of imports, the United States accounted for 37%, Malaysia accounted for 18 per cent, and other importing countries accounted for only 3 per cent. From January to July 2017, South Korea’s imports fell 6 percentage points, US imports rose 14 percentage points, Malaysia’s imports fell 9 percentage points. Analysis of the main reason is that by the end of 2016 South Korea’s anti-dumping applications against Europe and the United States passed, and from October began to import to South Korea’s Europe and the United States ethylene glycol butyl ether need to pay 23% -25% tariffs. Compared to the US goods into China need to pay 10% -14% of the anti-dumping duty is much higher. So a large number of US goods from the Korean market fought in the Chinese market, South Korean goods more to stay in their own sales, so 2017 in January-July US imports accounted for a significant increase in imports.
C, the price of imported goods
Return since 2016 ethylene glycol butyl ether imports average price trend, we can see since the second half of 2016, ethylene glycol butyl ether imports average shock upstream, at the end of 2016 due to a large number of European and American low-cost goods, the average import price Narrow down, but into the 2017 ethylene glycol butyl ether imports average price again continued steady upward trend. By July 2017, the average price of ethylene glycol butyl ether was $ 1160 / t, up 8.4% from $ 1070 / ton at 2017, up 27.5% from $ 910 / tonne in June 2016.
Environmental protection continued to increase the apparent demand for overweight year on year decline
From January to August in 2017, the apparent consumption of ethylene glycol butyl ether in China was about 925,000 tons, down by 11,500 tons compared with the same period of last year, down 11% year on year. In 2017, most chemical products rose sharply, ethylene glycol butyl ether is no exception. Due to the sharp rise in raw material prices, downstream users and brokers inquiry enthusiasm is low, with 2017 environmental protection efforts continued unabated, the lower reaches of the region more than the factory downtime, small and medium enterprises significantly reduced the amount of butyl ether procurement.
Saudi new butyl ether plant put into operation in the market competition intensified
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According to incomplete statistics, 2016 global ethylene glycol butyl ether production capacity of about 1.093 million tons, of which North America is more concentrated production capacity, accounting for 39% to the United States Dow, Eastman, Li Ande as the main supplier; Asia production capacity is more dispersed, production accounted for about 29% of China’s Daya sound and South Korea Lotte petrochemical production capacity is larger; the other in Europe accounted for 28% of total production capacity, Ines, BASF production capacity. Latin America accounted for the smallest proportion of production capacity, accounting for only 4%.
Comprehensive analysis, China’s ethylene glycol butyl ether market will face more intense challenges. Supply side, due to a long time the domestic market is occupied by a large number of imports, the overall improvement of the domestic factory operating rate is limited. Coupled with Dow’s low-cost supply in Saudi Arabia is about to rush into the Chinese market, with the release of new production capacity, domestic and foreign goods will be subject to greater impact. Demand, due to the continued efforts of China’s environmental protection efforts in the past two years, the end-user consumption of most chemical products gradually reduced, 2017 January-August ethylene glycol butyl ether apparent demand fell 11%. So the supply of shrinking demand in the case of ethylene glycol butyl ether market will enter the era of significant oversupply, Saudi butyl ether into China, the ethylene glycol butyl ether market will face a new supply and demand rebalance, the future flooding the market Will be a sharp decline in profits, sales pressure and other inevitable trend.
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