"The world has been suffering from the Qin Dynasty for a long time!" " Chen She Family "
So Chen Sheng and Wu Guang stood up!
” Ethylene glycol has been losing money for a long time! ” This is probably the voice of domestic ethylene glycol production equipment. The value of
is about 4,500-5,000 yuan, and the loss range is as high as about 1,000-2,000 yuan. The loss lasted as long as half a year. This is the true state of ethylene glycol, and it is also a logic that the market cannot understand this year.
The valuation research system in the traditional futures theory seems to be invalid. What is the logic of commodity pricing? This is also a big problem that troubles chemical researchers and the industrial chain.
The main ethylene glycol 2209 contract position has also increased significantly, with the highest value approaching 400,000 lots, which is 4 million tons when converted into ethylene glycol!
The ethylene glycol port can store about 1.28 million tons, and part of the inventory is non-delivery inventory. The virtual-to-real ratio is already at a very high position, and risks accumulate rapidly.
As can be seen in the above figure, with the rapid increase in positions, the price of ethylene glycol has fallen sharply.
Ethylene glycol is a product in a financial confrontation between the capital market and industrial forces. From a capital perspective, it seems that high inventory is the reason for becoming a short allocation.
However, from an industry perspective, the device has suffered long-term and substantial losses, and the low valuation will be repaired sooner or later. And high inventories have been reflected in prices, and device production cuts are expected.
The overall operating load of domestic ethylene glycol this week is 53.55% (a decrease of 2.75% from the previous period), of which the operating load of coal-based ethylene glycol is 46.47% (a decrease of 4.28% from the previous period)!
Early market rumors Satellite petrochemical 900,000 tons of the 1.8 million tons device is scheduled to be inspected for a week! The most competitive gas laws are under pressure.
In the first half of this year, some devices of the state-owned capital system represented by Sinopec also have load reduction plans!
A certain petrochemical company in East China also has a maintenance plan for its 1.8 million-ton ethylene glycol unit!
From state-owned enterprises to private enterprises, there is great pressure to lose money!
From an industrial point of view, the equipment has suffered long-term and substantial losses. The low valuation will be repaired sooner or later, and the high inventory has been reflected in the price. It is expected that the equipment production reduction will come, and it is already in the darkest moment.
futures capital has excessively suppressed prices, causing significant price losses in the entire industry chain, equipment production cuts, and economic decline. Can the logic of shorting the industry chain continue?
Futures serve the industry and are the political background.
This is not the first time that the industry has been suppressed by financial capital. This war without gunpowder has been fiercely fought on the 2205 contract. Can the
209 contract replicate the story of 2205 again?
Let’s first take a look at how the 2205 contract is laid out by securities firm capital.
1 Ethylene glycol 2205 contract long-short confrontation
After the Spring Festival of 2022, the long-short war began to heat up on the ethylene glycol 2205 contract. Judging from the position of the ethylene glycol 2205 contract, after the Spring Festival, funds did not reduce seasonal positions as much as in the early stage. .
A large number of funds continued to increase their positions on February 10, 2022, going against seasonal rules.
was still holding a huge amount of and before 2205 was about to enter the delivery month, and the fund transfer did not occur. Obviously, there was a serious confrontation between the long and short parties during the delivery of the 2205 contract.
At that time, the fundamentals of ethylene glycol were that the profits of equipment continued to suffer losses, and this lasted for a long time. The profits of industrial equipment were extremely compressed, and the bulls and the shorts refused to give in to each other.
During the 2205 contract delivery period, it was also a period of high inventory and high warehouse receipt pressure. Before the 2205 delivery month, the futures company’s institutional positions at that time were as follows:
The long positions were mainly industrial customers from Jiangsu and Zhejiang, and the short positions were concentrated in CITIC The confrontation between futures and Guotai Junan continued until the end of the delivery month.
2 Ethylene glycol 2209 contract positions
This phenomenon happened again on 2209. We see that the financial situation of the 2209 contract is still that the brokerage is short against the industry background. The seasonal position transfer has not yet started, and the counter-seasonal increase in positions start.
The 2301 contract repeats the story of 2209. There is still no fund transfer behavior. Most of the main funds are engaged in a fierce battle in the 2209 contract.
Ethylene glycol positions once again replicated the situation of the 2205 contract, and it was still the pressure on the price from the short sellers of the brokerage firms.
Whether it is the 2205 contract or the 2209 contract, the short funds are mainly from the background of securities firms, not industry funds.
When market funds are excessively suppressed, futures prices deviate far from fundamentals, and risks are also increasing.
As for diethylene glycol , which has the same production chain as ethylene glycol, the price can reflect the fundamentals and has not been severely suppressed like ethylene glycol.
Let’s take a look at the price of diethylene glycol. Usually the volatility of the two is consistent.
The essence of futures is price discovery and industrial risk management. Once attacked by capital, the industry will suffer losses, which will affect the national economy and the broader market .
Or do industrial customers also need to form a financial department? To cope with price risk fluctuations?
Futures margin has exceeded one trillion, and funds from securities firms have poured into the futures market. Enterprises in the industrial chain usually work hard to create social value as their main purpose.
Research on finance is in its infancy and is easily affected by capital, making it more difficult for businesses to operate. Financial innovative tools are emerging in an endless stream. If not restrained, it will inevitably lead to significant market fluctuations.
3 low valuation of ethylene glycol
Futures prices not only reflect the contradiction between supply and demand, but also have financial functions. The impact of financial capital on futures prices is a double-edged sword.
Judging from the profits of ethylene glycol’s petroleum process and coal chemical equipment, the overall industry is in a large area of loss, the profits of the overall industry have been compressed, and the valuation of ethylene glycol has not been restored for a long time.
Futures prices not only reflect the contradiction between supply and demand, but also have financial functions. The impact of financial capital on futures prices is a double-edged sword.
The ethylene glycol industry has suffered long-term losses and prices have been suppressed, which may affect the healthy development of the overall industry. The commissioning of some devices has been delayed. In July, planned maintenance of loss-making devices began to increase. The margin of
futures market has exceeded 1 trillion, and a large amount of funds such as quantitative capital and brokerage capital have flowed in. On the one hand, it has assumed the function of risk transfer and and provided liquidity.
On the other hand, the profit-seeking nature of financial capital requires industrial customers to improve their investment research capabilities and face new challenges. Their opponents are becoming stronger and more professional.
From the perspective of seasonal patterns of inventory, the textile industry usually destocks seasonally in the third and fourth quarters. This year, due to the interference of the epidemic, downstream textile inventories are relatively high.
Will the storage area become full in the later period, forcing equipment to reduce production, or will there be changes in the cost side? These are important fundamentals that both long and short parties need to pay attention to.
Last month, the State Council held a national video and telephone conference on stabilizing the economy. Li Keqiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, delivered an important speech.
In March, especially since April, indicators such as employment, industrial production, electricity and freight transportation have dropped significantly. In some aspects and to a certain extent, the difficulties are greater than when the epidemic was severely impacted in 2020.
Development is the foundation and key to solving all problems in our country. Maintaining employment, people's livelihood, and preventing risks all require the support of development. We are currently at a critical juncture that determines the economic trend throughout the year. We must seize the time window and strive to push the economy back to normal track.
We must fully implement the new development concept , efficiently coordinate epidemic prevention and control and economic and social development, strengthen confidence, face difficulties, put stabilizing growth in a more prominent position, strive to protect market entities, protect employment and people's livelihood, and protect the Chinese economy Resilience, strive to ensure that the economy achieves reasonable growth and the unemployment rate drops as soon as possible, and keep the economy operating within a reasonable range.
The 20th National Congress of the Communist Party of China will be held in 2022. The Chinese economy has begun to trade the logic of recovery. We also hope that the Chinese economy will stabilize and the chemical industry chain will recover. Will there be a larger stimulus policy in the second half of the year?
is also what we are eagerly looking forward to coming. We must have an optimistic attitude. The economy will always recover. Even if there are difficulties ahead, our Chinese people are resilient and there is hope ahead!
