Ethylene Glycol Market Dynamics Report (Recent Update)

I. Price Trends
- Spot Prices: As of May 22, 2026, the domestic oil-based ethylene glycol (EG) market average price stood at RMB 4,903.33/ton, down 4.88% from April 30. On May 25, Satellite Chemical quoted EG at RMB 4,500/ton, while Shanxi Lu’an Huagong’s polyester-grade EG starting auction price was set at RMB 4,100/ton—indicating persistent downward pricing pressure.
- Futures Prices: On May 22, the EG main futures contract closed at RMB 4,587/ton, falling 3.19% on the day and hitting an intraday low of RMB 4,483/ton. Port spot prices declined 3.88% daily, while domestic truck-loading EG spot prices fell 2.1%.

II. Supply-Demand Balance
- Supply Side:
- Domestic Operating Rates: Coal-based EG operating rates remain above 60%, with full-capacity operation at facilities such as Yulin Chemical and Qianxi Coal Chemical—resulting in continuous supply expansion.
- Import Outlook: Multiple Middle Eastern EG plants are undergoing maintenance, leading to expectations of reduced import volumes into China during May–June; however, the actual arrival schedule has not yet fully materialized, and market pricing has already partially discounted the anticipated “import reduction.”
- Plant Updates: A 500,000-ton-per-year EG plant in Zhejiang underwent unplanned shutdown; Donglian Chemical (Taiwan)’s 250,000-ton-per-year facility halted operations for 3–4 weeks due to unforeseen circumstances; a Canadian 460,000-ton-per-year plant is scheduled for a one-week maintenance in June.
- Demand Side:
- Polyester Operating Rates: Average domestic polyester plant operating rates stand at only 75%–77%, down 3–5 percentage points year-on-year, reflecting shrinking spot demand.
- Downstream Weaving Sector: Jiangsu-Zhejiang weaving machine utilization is merely 66%; orders are predominantly small-batch and fast-response orders, while end-user inventories remain high. Polyester plants have proactively reduced operating loads, creating a negative feedback loop: weak demand → load reduction → even lower procurement → further price decline.

III. Inventory & Cost Structure
- Port Inventory: Total EG inventory at major East China ports stands at 683,000 tons—down 89,400 tons from April 30—but remains elevated in absolute terms, offering limited price support.
- Cost Drivers:
- Crude Oil Impact: Near-finalization of the U.S.–Iran nuclear deal draft triggered a sharp oil price collapse; Brent crude plunged over 6% intraday, falling from USD 109/barrel, while WTI crude breached the USD 100/barrel threshold—directly compressing the cost floor for oil-based EG.
- Coal-Based Costs: Domestic thermal coal prices remain stable but weak, enabling improved profitability for coal-based EG production and further lowering the effective cost floor for spot EG.

IV. Market Sentiment & Capital Flow
- Profit-Taking Exit: Accumulated substantial gains in the EG main futures contract during March–April—driven by Middle Eastern geopolitical tensions—prompted concentrated profit realization by market participants in May.
- Algorithmic Stop-Loss Triggering: On May 22, the main futures contract broke below the critical support level of RMB 4,600/ton, activating a wave of algorithmic stop-loss orders and intensifying short-side momentum.
- Cautious Sentiment: With sluggish terminal demand and weakening cost support, market participants—including traders and downstream fabricators—have adopted a wait-and-see stance, reluctant to initiate proactive purchases.

Analysis & Assessment
1. Core Driving Factors:
- Cost Collapse: Advancing U.S.–Iran deal prospects precipitated a crude oil crash, directly eroding EG’s cost support.
- Supply-Demand Imbalance: Robust domestic coal-based supply growth, lagging import reduction impact, and seasonally weak polyester demand—combined with still-high port inventories—continue to weigh on prices.
- Capital Convergence: Profit-taking and algorithmic stop-losses converged, amplifying intraday declines and shifting market sentiment decisively bearish.

2. Short-Term Contradictions:
- Cost Side: Crude oil volatility remains pivotal; sustained de-escalation in geopolitical tensions would leave cost support fundamentally fragile.
- Demand Side: No improvement observed in polyester operating rates or downstream weaving order intake—weak demand is entrenched.
- Supply Side: High coal-based operating rates and delayed import reduction effects offset each other, leaving net supply pressure unresolved.

Outlook
1. Price Trend:
- Short Term: EG prices are expected to remain weak; the main futures contract may test the RMB 4,400–4,500/ton support zone, with spot prices tracking futures downward.
- Medium Term: Key watchpoints include crude oil price stabilization/recovery and any turnaround in terminal order volumes. Should crude rebound or polyester operating rates improve meaningfully, a short-term price recovery is possible; otherwise, the bearish trend is likely to persist through the traditional off-season (June–July).

2. Risk Factors:
- Geopolitics: Developments related to the U.S.–Iran agreement, potential Middle Eastern supply disruptions, or other geopolitical shocks could trigger sharp crude oil volatility—and consequent cost-driven EG price swings.
- Demand Recovery: Unexpected acceleration in downstream weaving order inflows—or synchronized restocking by polyester plants—could provide temporary demand support.
- Supply Disruptions: Unplanned shutdowns at domestic coal-based EG plants or significantly lower-than-expected import arrivals could spark short-term supply tightness concerns.