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

May 29 (News)

May ethylene glycol prices decreased

In 2026, the price of ethylene glycol significantly dropped in May. According to the data, as of May 29, the average market price of oil-based ethylene glycol in China was 4,770 CNY/ton, a decrease of 7.47% from the average price of 5,155 CNY/ton on May 1.

Regarding ethylene glycol at ports, as of the 29th, the spot contract basis quotes for ethylene glycol at ports (starting from 500 tons) have been fluctuating along with market prices. Today, the intraday basis quotes for spot contracts ranged between +85 and +93. By the close of trading, the basis quotes for next-week contracts (before June 5) were in the range of +102 to +107, while the basis quotes for the June-delivery contracts were between +123 and +125.

The spot price of coal-based polyester-grade ethylene glycol in China (bulk, tax included, self-pickup) for factory pick-up is 4030-4150 CNY/ton.

Regarding ethylene glycol on the international market, as of May 29, the negotiated and settled landed prices for Chinese shipments were around USD 578 per ton, while those for Southeast Asian shipments were around USD 700 per ton.

May 2026 Ethylene Glycol Port Inventory Changes:

On May 28, 2026, the total spot inventory of monoethylene glycol in the main ports of East China was 646,000 tons, a decrease of 126,400 tons from the total spot inventory of 772,400 tons on April 30, 2026, and a decrease of 307,000 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 in May 2026 in China:

In May 2026, the price of ethylene glycol plummeted, primarily due to the fading of geopolitical premiums, a sharp drop in crude oil prices, high operating rates of coal-to-ethylene glycol production in China, the off-season for polyester demand, and the concentrated withdrawal of funds, forming a negative feedback loop of "cost collapse—supply increase—weak demand."

I. Cost Side: Easing Tensions in the Middle East, Sharp Drop in Crude Oil Prices, and Geopolitical Premium “Bursting the Bubble”

The primary driver behind the April rise in ethylene glycol prices was the U.S.-Iran conflict and the disruption of shipping through the Strait of Hormuz, prompting market players to rush to stockpile goods and driving up the “geopolitical risk premium.” In May, however, the situation took a turn: U.S.-Iran negotiations resumed, expectations of reconciliation intensified, and prospects for the resumption of navigation through the strait improved, causing the conflict premium to rapidly dissipate. On the cost side, oil prices plummeted sharply—Brent crude fell from $115 per barrel (early May) to between $99 and $105 per barrel (mid-to-late May), leading to a collapse in the cost of producing ethylene glycol from petroleum.

II. Supply Side: China’s high operating rates & revised import forecasts are putting even greater pressure than expected.

In May, China's overall ethylene glycol operating rate was between 58% and 68%; among which, coal-based production was 68% to 82% (at a high level), and oil-based production was 54% (under maintenance but still not low overall). On the import side, due to plant maintenance in the Middle East, the arrival expectations for May and June have decreased, but the short-term arrivals are still relatively high. The "reduction in imports" has already been priced in, and there is no immediate shortage.

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

In May, polyester plant operating rates averaged between 75% and 77%, down 3 to 5 percentage points year-on-year, with increasing production cuts in both filament and staple fibers. From the perspective of terminal demand, textile and apparel exports remain weak, and domestic demand is sluggish. The downturn in the real estate sector is weighing on construction materials and home appliances, indirectly suppressing polyester demand. Polyester plants’ raw material inventories stand at only 7.5 days—lowest in nearly three years—forcing them to meet only essential needs and leaving them with little willingness to proactively replenish stocks. Weak terminal demand leads to high polyester inventories, prompting production cuts, reducing ethylene glycol purchases, driving prices lower, and further discouraging restocking—a negative feedback loop that continues to intensify.

IV. Capital and Sentiment: The U.S. dollar strengthens, expectations turn bearish, and capital is concentrating on exiting the market.

May reconciliation news triggered concentrated stop-losses, leading to consecutive heavy volume declines in futures, which in turn dragged down the spot market.

June 2026 Ethylene Glycol Price Forecast:

The price trend of ethylene glycol in June is likely to be "weak first, then stable, with a narrow fluctuation range," making it difficult for significant increases or decreases. The central price of port spot goods is about 4,400 CNY/ton.