Returning to Fundamentals: The Core Drivers Behind the Etylene Glycol Pullback on March 31

March 31st News

In March, the price of ethylene glycol in China surged by 35.47%, with a slight decline on the 31st.

In 2026, the price of ethylene glycol surged in March, with a slight pullback today. According to data, as of March 31, the average price of oil-based ethylene glycol in China was 5,145 CNY/ton, an increase of 35.47% from the average price of 3,798 CNY/ton on March 1.

In terms of ethylene glycol at Chinese ports, as of the 31st, the basis quotes for spot contracts (starting from 500 tons) fluctuated with the market. This week, the intra-day basis quotes for spot contracts operated within the range of 0 to +15. By the close, the basis quotes for next week's contracts (before April 10) were +20 to +25, and the basis quotes for late April contracts (before April 25) were +25 to +27. In the morning, the market declined, and there was not much basis trading, leading to a slight rise in the market basis.

The spot price of coal-based polyester-grade ethylene glycol in China (bulk, tax included, self-pickup) for factory pick-up is 4600-4800 CNY/ton.

In terms of overseas ethylene glycol, as of March 30, the recent cargo arrival price was discussed and transacted around $660 per ton.

March 2026 Changes in Ethylene Glycol Port Inventory:

On March 30, 2026, the total spot inventory of monoethylene glycol in the main ports of East China was 953,000 tons, an increase of 26,600 tons from the total spot inventory of 926,400 tons on March 2, 2026, in the main ports of East China.

March 31st Analysis of the Slight Decline in Ethylene Glycol in China:

On March 31, the decline in ethylene glycol was the result of a resonance of short-term sentiment, capital flows, and supply-demand structure: the previous surge had overdrawn the positive factors, and the weak demand downstream could not support high prices. Since March, the biggest variable affecting ethylene glycol prices has been the market's assessment of the extent of supply disruptions in the Middle East (for more details, see: Focus on the Risks of the Strait of Hormuz: Ethylene Glycol Import Security and Price Trend Forecast https://www.100ppi.com/forecast/detail-20260228-202433.html). On the 31st, it was officially confirmed by the White House that Trump requested an agreement with Iran by 8:00 PM Eastern Time on April 6, previously suspending strikes on Iranian energy facilities. It was revealed on March 31 that even if the strait remains largely closed, they are willing to end the operation, shifting the core goal from "opening the strait" to "weakening Iran's military power + diplomatic pressure," to avoid the war dragging beyond the 4-6 week timeframe. The previous hype quickly cooled down, and prices returned to being dominated by the fundamentals of supply and demand.

The easing of supply-side concerns is the primary reason behind this recent price decline. The extreme market expectation—“Middle East supply disruption leading to prices breaking through 6,000”—that had formed earlier has been rapidly corrected. From the perspective of actual supply, major Middle Eastern ethylene glycol producers such as Iran and Saudi Arabia have not experienced large-scale, long-term plant shutdowns; instead, only localized production reductions or short-term force majeure events have occurred, without causing any substantial impact on overall supply. On the import front, ethylene glycol import volumes from March to April fell from over 1.1 million tons to below 1 million tons. This contraction represents a moderate adjustment rather than the sharp drop that the market had previously feared. Meanwhile, timely replenishment of ethylene glycol supplies from the U.S. and Southeast Asia, coupled with approximately 950,000 tons of inventory reserves at ports in East China, can effectively cushion the import shortfall for one to two months. This further confirms that the current ethylene glycol supply is stable and free from any significant disruptions, with the supply gap remaining within a manageable range. As a result, the geopolitical premium that had been driven by earlier geopolitical tensions is gradually dissipating.

The marginal weakening of cost support has further intensified the pressure on ethylene glycol to correct. After reaching a high, international crude oil prices have slightly declined. As key raw materials for ethylene glycol production, naphtha and ethylene prices have also weakened, leading to a continuous weakening of cost support for ethylene glycol. In this context, the production profit of oil-based ethylene glycol has been somewhat restored, and companies' willingness to maintain high prices has decreased. They are no longer actively sustaining high prices, providing room for price declines.

The shift in market sentiment has become the direct driver of the price decline, with the market atmosphere gradually changing from the previous "short squeeze" situation to cautious observation.