September 8th, news
Ethylene Glycol Market Situation in China
1. In September, the price of ethylene glycol in China continued to rise.
In 2026, the price of ethylene glycol has surged, currently reaching a four-year high. According to data, as of September 8, the average spot market price for oil-based ethylene glycol among Chinese traders is 6458.33 CNY/ton, up 67.13% from the beginning of the year (January 1) when the average market price was 3864.17 CNY/ton.
Port paper goods are mainly priced based on the basis, with prices closely following the fluctuations of the futures market. Recently, the futures price of ethylene glycol has risen significantly, and the basis quotes for ethylene glycol paper goods at the port from basis traders have been high and firm. The basis for this week's contract is 900-940 CNY/ton, with a quote range of 6700-6900 CNY/ton.
The ex-factory bid price for spot polyester-grade ethylene glycol produced from coal in China (bulk, tax included, self-pickup) is 6050-6400 CNY/ton.
2. Extremely low ethylene glycol port inventory as of September 2026:
On September 7, 2026, the total spot inventory of monoethylene glycol in the main ports of East China was 1,200,000 tons, a decrease of 296,000 tons from the total spot inventory of 4,160,000 tons on July 30, 2026; and a decrease of 8,064,000 tons from the total spot inventory of 92,640,000 tons on March 2, 2026.
Currently, the port inventory of ethylene glycol in China is extremely low, hitting a historical low.
Houthi Militia Warns of Impact on Ethylene Glycol Prices Due to Attacks on Saudi Energy Facilities
1. China's Ethylene Glycol Import Basic Pattern
China's total import dependence for ethylene glycol is about 27-28%, with total imports of 7,720,000 tons in 2025.
2. Saudi Arabia is China's largest source of ethylene glycol: imports from Saudi Arabia account for 54-55% of the total import volume, approximately 4,220,000 tons per year; the Middle East as a whole accounts for more than 71% of imports.
3. Saudi Arabia's eastern Jubail and other ethylene glycol petrochemical bases are highly dependent on the Strait of Hormuz for product transportation; shipments from facilities on the west coast go through the Red Sea-Bab el-Mandeb Strait, both of which are within the threat range of attacks by the Houthi armed forces.
4. China has coal-to-ethylene glycol production capacity as a hedge, but it is difficult to fully compensate for the significant shortage of supplies from Saudi Arabia in the short term.
2. The Core Points of This Incident (News)
The Houthi armed group issued a public warning: All critical energy and industrial facilities within Saudi Arabia are legitimate targets for attack. In retaliation for Saudi military actions, not only maritime vessels—but also Saudi Arabia’s onshore petrochemical and oil-and-gas facilities have been directly added to the list of threatened targets.
The risks are layered as follows: ① The risk of Saudi Arabia’s domestic ethylene glycol production facilities being attacked and shut down; ② The risk of shipping in the Persian Gulf and the Red Sea being attacked, leading to disruptions in export logistics.
Three, the transmission path of price increases in China
1) Emotions and risk premium (the short-term market reacts first)
Market trading is driven by “expectations of supply disruptions”—it doesn’t necessarily mean that the facility has been bombed.
If the Saudi ethylene glycol petrochemical industrial zone (such as Jubail) is at risk of being attacked, overseas traders will immediately raise FOB quotes; Chinese bullish funds will trade on the expectation of reduced imports, causing futures and spot prices to rise rapidly.
Two shipping routes are under pressure simultaneously: the eastern route through the Strait of Hormuz and the western route through the Red Sea and the Bab-el-Mandeb Strait. The Houthis are threatening the entire territory of Saudi Arabia, making it impossible to completely avoid risks on both routes. Shipping companies will add war risk surcharges, and some vessels will detour around the Cape of Good Hope, significantly increasing maritime freight costs and further raising the cost of goods upon arrival in China.
2) Scenario One: Only verbal warnings are issued, with no actual strike capabilities.
The actual supply has not been substantially cut off; it's just that the shipping risks have increased.
Price: Rising in pulses, with limited persistence in the risk premium. Once the conflict fails to escalate, the premium will quickly subside; China’s port inventory and arrival forecasts will once again take center stage in shaping market dynamics.
3) Scenario Two: If Saudi oil/petrochemical (ethylene glycol) facilities are actually hit and damaged
Saudi Arabia’s total ethylene glycol production capacity amounts to 7.75 million tons, making it one of the world’s largest exporters.
1. Device damage leading to shutdown: This directly reduces the global supply of ethylene glycol exports, with China seeing a monthly shortfall of several hundred thousand tons from Saudi sources. The total volume of alternative sources (Canada, the U.S., and Kuwait) is limited, making it difficult to close the gap in the short term.
2. If there is an attack on the waterway, ships will avoid the risk, leading to a significant decrease in arrivals at Chinese ports. Port inventory in China will rapidly decline, and spot prices will continue to strengthen, with near-month contracts much stronger than far-month ones.
3. Crude oil prices rose in tandem, with Saudi ethylene glycol being produced via the naphtha/ethane route, leading to increased raw material costs, which further supported the bottom price of ethylene glycol in China.
4) China's hedging force (to curb price increases)
1. China's coal-to-ethylene glycol production capacity, with the increase in prices, has seen an improvement in the operating rate of coal-based production, which can offset part of the import shortfall.
2. Downstream polyester demand, if the raw material prices increase too quickly, weaving and polyester factories in China may resist, leading to reduced production, which in turn constrains the upward space for ethylene glycol.
IV. Current Market Realistic Constraints
1. The Houthis have issued similar warnings multiple times in the past; verbal threats do not equate to actual attacks on production capacity. The most significant feature of geopolitical drivers is their repetitive nature, with rapid market surges and quick retractions, depending highly on whether the conflict materializes.
2. The current port inventory of ethylene glycol in China and the monthly forecast of actual arrivals are the key indicators to verify whether the geopolitical factors have truly affected the physical market in China; if the volume of arrivals does not show a significant decline, the geopolitical premium in the market will gradually be absorbed.
3. Far-month contracts are more dependent on the new production capacity additions in China, with geopolitical conflicts having a weaker impact on far-month contracts compared to near-month ones, making it likely for a structure where near-month contracts are stronger and far-month contracts are weaker.
V. Summary
Because more than half of China's ethylene glycol imports come from Saudi Arabia, the Houthi designation of all Saudi energy facilities as targets for attack has introduced an upward risk premium for ethylene glycol, which is one of the catalytic factors for the recent price increase.
2. The market trend will largely depend on what happens next: whether there is an actual attack on Saudi petrochemical facilities, and whether shipping in the Persian Gulf and Red Sea is actually disrupted. If it's just verbal threats, the market reaction will be a short-lived speculative spike; but if production capacity or shipping is substantially affected, ethylene glycol will see a sustained supply-driven price increase.
3. Risk: If the conflict eases, the previous geopolitical premium will be quickly unwound. Meanwhile, the release of China's coal-to-chemical capacity and weakening downstream demand will both put pressure on prices.
