In January 3rd, the United States launched an air raid, killing senior commander Sulley Manny of Iran, and escalating the conflict between the United States and Iraq. The two sides fell into a state of sabre rattling, causing severe financial and commodity disturbances.

In January 3rd, Iran's senior commander Sulley Manny was killed in the US UAV air raid on Baghdad. President Trump personally ordered the US Army to kill Sulley Manny. Prior to this, Iran state television and Iraqi media reported the death of Sulley Manny.

The news became the focus of attention last Friday and weekend. Various news websites were flooded with all kinds of websites. After continuous fermentation, after the opening of this Monday, gold and gold went crazy, and the trend of products could be upgraded.

The impact of the Middle East situation on the ethylene glycol market is mainly from the supply side and the cost side.

Impact of supply side:


In recent years, the expansion of ethylene glycol in China is faster. However, because of the rapid development of polyester in the downstream of ethylene glycol, the import dependence of ethylene glycol has not changed much. It still remains above 50-60. The main importers of ethylene glycol in China are concentrated in the Middle East, accounting for 6 of the total. Saudi Arabia imports account for the most proportion in the Middle East countries, accounting for 45% of the total imports.

The incident took place in the Middle East. Therefore, once the conflict escalated, the Middle East would be in a state of war, which might have a greater impact on the Middle East installations. Besides, Iran also controlled the thoroughfare and thoroughfare of the Strait of Hormuz, and the import volume of the Middle East goods would be greatly reduced. This would have a huge impact on the supply side of ethylene glycol in China. At present, the main port inventory of China's ethylene glycol is at a low level. According to long data monitoring, as of January 6th, East China's main port stock is 365 thousand tons, less than 50% of the same period last year. Such a low inventory base, if there are problems at the supply side, will cause a severe market reaction.

Cost side effect: since last year, the profit level of ethylene glycol has dropped sharply due to the influence of overcapacity, and has been in a big deficit for the whole year. Although the market trend of ethylene glycol is strong in recent years, the factory profit is still near the profit and loss line.

In the Middle East, there will be war and crude oil will rise sharply, which will greatly increase the cost of the glycol plant. If the price of ethylene glycol does not follow the cost increase, it will make the profit level of the factory deficit increase. This will greatly damage the initiative of the glycol plant, especially the devices in such countries as Taiwan, Korea and Japan, because of the reasons of production profit, the rate of drop or loss of production is very great. The import proportion of Taiwan province is second, and the import proportion is 13.29%. The change of import quantity in this area is only inferior to Saudi Arabia.

Therefore, whether from the supply side or the cost side, the progress of this incident has become an important factor leading to the market trend of ethylene glycol.