June 12 news
June ethylene glycol prices in China stopped falling
In June 2026, the price of ethylene glycol operated steadily, interrupting the previous one-sided downward trend. According to the data, as of June 12, the average spot market price of oil-based ethylene glycol traders in China was 4723.33 CNY/ton, a decrease of 0.98% from the average price of 4760 CNY/ton on June 1.
The spot prices of ethylene glycol at port terminals are primarily priced based on basis differentials, with prices closely following fluctuations in the futures market. As of June 2026, port-terminal ethylene glycol spot prices have seen a slight increase. As of the 12th, today’s spot contract quotations (starting at 500 tons) showed basis differentials ranging from +115 to +123. The intraday basis differential narrowed slightly by 5 to 8 CNY per ton. At closing, the basis differential for next-week contracts (before June 18) was quoted between +123 and +125, while the basis differential for the June delivery contract was quoted between +130 and +135.
The price of spot coal-based polyester-grade ethylene glycol in China (bulk, tax included, self-pickup) for factory pickup is 4030-4150 CNY per ton.
June 2026: Changes in Ethylene Glycol Port Inventory:
On June 11, 2026, the total spot inventory of monoethylene glycol in the main ports of East China was 611,000 tons, an increase of 5,000 tons from the total spot inventory of 606,000 tons on June 1, 2026, in the main ports of East China.
Reasons for the Stabilization of Ethylene Glycol Prices in June 2026:
1. Supply and Demand Balance: The supply and demand of ethylene glycol in China have reached a relatively balanced state, leading to a stabilization in prices. 2. Production Cuts: Some domestic producers have implemented production cuts, reducing the overall supply and helping to stabilize prices. 3. Increased Demand from Downstream Industries: The demand from downstream industries such as polyester and antifreeze has increased, providing support for ethylene glycol prices. 4. Raw Material Costs: The cost of raw materials, such as ethylene, has stabilized, which has also contributed to the stabilization of ethylene glycol prices. 5. Macroeconomic Factors: Positive macroeconomic indicators in China, including stable economic growth and favorable policies, have supported the overall market sentiment.
These factors combined have led to the stabilization of ethylene glycol prices in June 2026.
In 2026, the ethylene glycol price stopped falling in June. The core reason is that after a significant premium squeeze in May, the actual transaction price of ethylene glycol (petro-based in East China) stabilized at around 4,400 CNY/ton, receiving strong support. The market took into account the shutdown and maintenance of multiple major facilities in June, combined with a reduction in import volume in May, as well as the rebound in the price of coal, providing the momentum for the ethylene glycol price to stop falling and start rising. The main trigger was the financial sentiment driven by instability in the Middle East, leading to a noticeable increase in futures prices.
Reasons for not being overly optimistic about the future market:
1. Weak demand; polyester is in the off-season, terminal orders are poor, and the willingness to replenish inventory is low, with negative feedback continuing;
2. Supply side: Pressure to resume production after maintenance, with imports gradually picking up;
3. Cost side: Oil prices are easing from their high levels, and coal prices face downward pressure.
I. Demand Side: The off-season remains weak, and negative feedback has yet to be broken.
Polyester operating rates remain low and still face the risk of further decline.
In June, the overall polyester production in China was about 80%, 7 percentage points lower than the same period last year; major filament factories continued to reduce production to maintain prices, and the demand for bottle chips was even weaker, leading to more voluntary production cuts. Multiple institutions estimate that by the end of June, the polyester production in China may drop to 76%-77%.
Terminal textile and apparel orders are insufficient, and weaving capacity utilization remains weak.
The operating rate of weaving machines in the Jiangsu and Zhejiang regions stands at only 61%, with a focus on small orders and quick-response orders, and there is no large-scale, concentrated restocking. Manufacturing PMIs in Europe and the U.S. continue to remain below the boom-bust threshold, and weak external demand is weighing heavily on textile exports.
Polyester raw material inventories are at low levels, with procurement driven solely by rigid demand.
Polyester plants have MEG inventory of about 7.5 days (the lowest in the same period over the past three years). Restocking is mostly phased and passive, with weak willingness for proactive restocking. The surge in filament sales is mainly due to short-term restocking, not a substantial recovery in the end market.
Real estate downturn drags down downstream sectors in China
The real estate sector remains weak, impacting polyester consumption in related sectors such as building materials and home appliances, and indirectly suppressing demand for MEG.
Supply Side: Resumption Pressure After Maintenance, Gradual Recovery of Imports
China's maintenance is concentrated but not permanently shut down, with more resumptions of production in June and July.
In June, most of the maintenance is planned short-term maintenance (10-45 days), and they will gradually restart from late June to July, leading to an increase in supply pressure. Currently, the profit margin for coal-based facilities in China is acceptable, with the operating rate maintained at a high level above 80%, providing ample motivation for resumption of production.
Middle East geopolitical tensions easing, imports arriving in China gradually increasing
The U.S. and Iran are engaging in both conflict and dialogue simultaneously. If navigation through the Strait of Hormuz resumes and Middle Eastern facilities restart, import volumes will see a noticeable rebound. We expect May to be the month with the lowest ethylene glycol import volume for the year; June imports are forecast to range between 200,000 and 250,000 tons, while July imports are expected to reach between 300,000 and 350,000 tons. Some Iranian facilities have already resumed operations, and nearby plants are restarting production, putting upward pressure on future import volumes.
Oil production facilities are operating at low capacity, but there is still potential for supply in the long term.
Although oil-based MEG production is under pressure from losses and operating at low loads, there is room for an increase in load if oil prices fall and profitability improves.
III. Cost Side: Oil prices, which have been at high levels, are easing slightly, while coal prices face downward pressure.
Risk of a Decline in the Geopolitical Premium for Crude Oil
U.S.-Iran negotiations have been fraught with setbacks. Once geopolitical tensions ease, oil prices could experience a sharp pullback, weakening cost support.
Coal production costs are not a "hard bottom" in China.
Currently, the price of thermal coal is high. The upward trend in prices caused by the events at the end of May has been somewhat offset recently due to China's supply guarantee policies. If the safety inspections of coal mines are relaxed and after the peak summer electricity consumption period, there is room for coal prices to decline, and the cash cost support for MEG will also decrease.
