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Since the start of this year, glyphosate and disperse dyes have dominated the chemical market, but recently, ethylene glycol has taken center stage. According to a report from Shanghai Daily, the price of ethylene glycol has made a strong rebound since July after months of decline. Danhua Technology, a major player in the industry, has seen improved sales since late June.
According to monitoring data from the business community, ethylene glycol climbed to second place in the chemical sector during July. From July 1 to August 8, the price surged over RMB 800 per ton, marking an increase of more than 10%. On August 8, the reference price reached RMB 8,133 per ton. Analysts attribute this sharp rise to several factors: increasing crude oil prices, which have pushed up the cost of raw materials like ethylene, as well as supply shortages in the market. Additionally, improving macroeconomic conditions and rising downstream demand have further fueled the price surge.
Danhua Technology is one of China’s largest producers of ethylene glycol. In addition to its 200,000-ton-per-year coal-based glycol plant, it also oversees five joint ventures with a combined annual capacity of 1 million tons. The company aims to reach an annual production target of 3 million tons through its coal-to-ethylene glycol projects. Currently, the domestic supply of ethylene glycol remains tight, with annual demand reaching around 10 million tons, of which approximately 70% is imported.
In 2012, Tongliao Jinmei, a subsidiary of Danhua Technology, produced 101,100 tons of ethylene glycol and 49,600 tons of oxalic acid. The average annual production load was about 63%, with the load increasing to over 85% by year-end. The UV transmittance of diol products has also been significantly improved. However, in the first quarter of this year, the company reported a loss of 74.73 million yuan, primarily due to reduced output at Tongliao Gold Coal caused by cold weather and operational issues.
The reporter learned yesterday that since the end of June, the production load at Tongliao Gold Coal has increased to between 70% and 80%, and sales have improved considerably. With the recent rebound in ethylene glycol prices, Danhua Technology is expected to see a significant improvement in its performance in the second half of the year.