In-depth Analysis of the Reasons for the Decrease in Ethylene Glycol Prices on May 22, 2026 in China

May 22nd News

May ethylene glycol prices in China have been reduced.

In May 2026, the price of ethylene glycol dropped significantly. According to the data, as of May 22, the average market price of oil-based ethylene glycol in China was 4,903.33 CNY/ton, a decrease of 4.88% from the average price of 5,155 CNY/ton on April 30.

In terms of ethylene glycol at Chinese ports, as of the 22nd, the basis quotes for spot contracts of ethylene glycol (starting from 500 tons) fluctuated with the market. This week, the intraday basis quotes for spot contracts were in the range of +90 to +95. By the close, the basis quotes for the end-of-May contracts were +100 to +102, and for the early-June contracts (before June 5th), the basis quotes were +110 to +115. The basis quotes for the end-of-June contracts were +135 to +137.

The price of spot coal-to-polyester grade ethylene glycol in China (bulk, tax included, self-pickup) for factory delivery is 4350-4450 CNY/ton.

Regarding ethylene glycol on the international market, as of May 21, the negotiated and settled landed prices for Chinese shipments were around USD 623 per ton, while those for Southeast Asian shipments were around USD 715 per ton.

May 2026 Ethylene Glycol Port Inventory Changes:

On May 21, 2026, the total spot inventory of monoethylene glycol in the main ports of East China was 683,000 tons, an increase of 5,000 tons from the total spot inventory of 678,000 tons on May 18, 2026; a decrease of 89,400 tons from the total spot inventory of 772,400 tons on April 30, 2026; and a decrease of 270,000 tons from the total spot inventory of 953,000 tons on March 30, 2026.

Analysis of the Reasons for the Decrease in Ethylene Glycol Prices on May 22, 2026:

On May 22, 2026, both the futures and spot prices of ethylene glycol experienced a significant decline. The main contract for ethylene glycol fell sharply, closing at 4,587 CNY/ton, with a single-day price decrease of 3.19%, hitting a low of 4,483 CNY/ton. The spot price of ethylene glycol at the port dropped by 3.88% in a day, while the spot price of domestically produced ethylene glycol (for vehicle pickup) decreased by 2.1%. This decline was a concentrated outbreak due to the collapse in the cost end, supply-demand imbalance, and a resonance of capital sentiment, with the core triggering factor being the sudden news of the draft agreement reached between the United States and Iran.

I. Cost Side: Geopolitical Premium Fades; Massive Drop in Crude Oil Leads to Collapse of Support

Breaking news has triggered an immediate plunge in oil prices. In the early hours of May 22, Beijing time, media citing Al-Arabiya TV reported that the U.S. and Iran have reached agreement on a final draft of the deal, mediated by Pakistan. The details are expected to be released within hours. Market prices instantly reflected the expectation of “eased geopolitical risks in the Middle East + Iran’s crude oil returning to the market.” As a result, Brent crude oil rapidly plunged from around $109 per barrel, with intraday price declines exceeding 6%. WTI crude oil fell below the $100 mark, directly triggering a collapse in cost support for ethylene glycol.

The cost of ethylene glycol produced from oil is declining rapidly. Ethylene glycol is highly correlated with crude oil prices; the sharp drop in oil prices has directly compressed the cost margin for oil-based ethylene glycol. The “risk premium” that had previously been driven up by geopolitical tensions is being quickly squeezed out, leading to an overall shift downward in the price center of the industrial chain.

Coal production costs have weakened in tandem, with high levels of operation maintained. Chinese thermal coal prices have remained stable but slightly weak, and the profit from coal-to-monoethylene glycol has been restored, with the facility utilization rate remaining above 60%. Facilities such as Yulin Chemical and Qianxi Coal Chemical Industry are operating at full capacity, further lowering the bottom line of spot costs.

II. Supply Side: High Operating Rates in China + Revised Import Expectations—Supply Pressure Remains Persistent

China's coal-to-ethylene glycol supply continues to increase. In May, China's coal-to-ethylene glycol operating rates remained high, with ample supply, exerting continuous supply pressure on the market.

The anticipated decline in imports is lagging, leaving some room for buffer in short-term arrivals. Although multiple plant maintenance activities in the Middle East are expected to reduce import volumes arriving in May and June, the short-term arrival schedule has not yet fully reflected this trend. As a result, the market has already begun pricing in the “reduction in imports” to some extent, but this hasn't yet led to an immediate supply gap.

Although port inventories have been reduced, the absolute levels remain relatively high. Although inventories at major ports in East China are on a continuous downward trend, they still remain at a moderate level compared to the same period in recent years, providing limited support for prices.

III. Demand Side: Polyester’s Off-Season + Weak End-Market Conditions—Negative Feedback Continues to Intensify

Polyester operating rates declined year-on-year, and rigid demand procurement has shrunk. In May, the average operating rate of Chinese polyester plants was only 75%-77%, down 3-5 percentage points from the same period last year, leading to a noticeable contraction in rigid demand procurement for ethylene glycol.

Terminal weaving orders are bleak, with severe inventory buildup. The operating rate of weaving machines in Jiangsu and Zhejiang is only 66%, with orders mainly consisting of small and quick-response orders. Terminal inventories are high, and polyester factories are actively reducing production, creating a negative feedback loop of "weak demand → reduced production → less procurement → falling prices."

Raw material inventories have fallen to low levels, and the market shows no willingness to build up stocks. Polyester plants’ raw material inventory days stand at only 7.5 days, the lowest level for the same period in nearly three years, leaving them merely sustaining rigid demand-based procurement, with prices lacking support from buyer interest.

IV. Capital and Sentiment: Profit-taking at high levels + Stop-loss triggered by price breakdown—price decline amplified

In the early stage, the price increase was too large, leading to a concentration of profit-taking. Due to the influence of the Middle East geopolitical conflict in March and April, the main ethylene glycol futures contract accumulated a large amount of profit. After May, with the expectation of easing geopolitical tensions warming up, funds concentrated on taking profits.

The breakdown of the key support level triggered programmed stop-loss orders. On May 22, the main contract fell below the critical support level of 4,600 CNY/ton, triggering a large number of programmed stop-loss orders. As short positions were concentratedly liquidated, this amplified the intraday price decline.

Market sentiment has turned pessimistic, and buying interest is heavily cautious. With weak terminal demand and easing cost support, market expectations for the traditional off-season in June and July continue to deteriorate. Most traders and downstream factories remain on the sidelines, reluctant to take proactive positions.