September 24th report:
Ethylene Glycol Market Situation in China
1. Ethylene glycol prices at high levels have adjusted downward.
In 2026, the price of ethylene glycol saw a significant increase, reaching a four-year high in September before a slight adjustment. According to the data, as of September 23, the average spot market price for oil-based ethylene glycol traders in China was 6521.67 CNY/ton, up 68.77% from the beginning of the year (January 1) when the average market price was 3864.17 CNY/ton, and down 2.78% from the peak of 6708.33 CNY/ton.
Port paper goods are mainly priced based on basis, with prices closely following the fluctuations in the futures market. Recently, the futures price of ethylene glycol has risen significantly, and the basis quotes for port paper ethylene glycol by basis traders have remained high and firm. Today's contract basis is between 1200-1600 CNY/ton; due to the final delivery day of this week's contract, there is a large fluctuation in market quotes, with actual transactions ranging from 1200-1300 CNY/ton. The basis quote for next week's contract is 1040-1100 CNY/ton, and the quote for the October lower half contract is 390-410 CNY/ton.
The ex-factory bid price for spot Chinese coal-based polyester-grade ethylene glycol (bulk, tax included, self-pickup) is 5900-6100 CNY/ton.
2. Extremely low ethylene glycol port inventory in September 2026:
On September 24, 2026, the total spot inventory of monoethylene glycol in the main ports of East China was 99,000 tons, a decrease of 317,000 tons from the total spot inventory of 416,000 tons on July 30, 2026; and a decrease of 827,400 tons from the total spot inventory of 926,400 tons on March 2, 2026.
Currently, the port inventory of ethylene glycol in China is extremely low, reaching a historical low.
3. Downstream polyester demand negative feedback
In the early stage, the continuous rise in ethylene glycol prices has been squeezing polyester processing profits, with significant losses in bottle chips and short fibers, leading companies to actively reduce production and conduct maintenance. Polyester operating rates have fallen to around 74%, lower than the same period in previous years. Orders for terminal weaving (weaving machines, texturing) are weak, and peak season inventory replenishment has not materialized. Downstream sectors are only purchasing based on immediate needs without actively stockpiling, resulting in lower-than-expected consumption of ethylene glycol.
Recent Reasons for the Decline in Ethylene Glycol Prices in China
In the earlier phase, ethylene glycol prices rose primarily due to risk premiums stemming from geopolitical tensions in the Middle East and extremely low port inventories. In this round of correction, the main drivers are easing geopolitical concerns, falling oil prices, and a recovery in Chinese supply, compounded by a weaker-than-expected peak polyester season during the “Golden September” period, prompting longs to lock in profits and exit the market.
1. Geopolitical risk premium rapidly unwinds (the most core driver)
Ethylene glycol import dependency is on Middle Eastern sources (Saudi Arabia, Iran, etc., which account for over 65% of China's imports). The previous market trend largely priced in the expectation of disrupted navigation through the Strait of Hormuz and potential import disruptions, coupled with a surge in crude oil prices, which pushed up the valuation of ethylene glycol.
Recently, the U.S. and Iran have signaled a de-escalation in negotiations, and Saudi pipeline operations have resumed. As a result, market dynamics have shifted from “supply disruptions” to expectations of shipping capacity recovery and a resumption of imports, leading to a concentrated unwinding of the geopolitical premium that had built up earlier.
Brent crude has retreated from above $100, and with the cost support for oil-based ethylene glycol shifting lower, the earlier price gains in ethylene glycol have outpaced those of PTA and PX, resulting in greater downside resilience.
2. Marginal improvement in China's supply, with expectations of an inventory turning point rising.
Chinese coal-to-ethylene glycol and oil-to-ethylene glycol plants are restarting after maintenance, with the overall operating rate rebounding to 76.8%. It is expected to further increase to 80% in October, leading to an increase in domestic production.
East China port inventory has ended the expectation of continuous destocking, and the market is no longer solely trading on the logic of "extreme shortage of spot goods."
The absolute value of spot inventory remains low, and the spot basis is still strong. The pressure mainly lies in the expectations for future months, indicating a structure where near-term is strong and long-term is weak.
3. Downstream polyester demand negative feedback, weak performance in the golden September (fundamentally bearish)
High-priced raw material ethylene glycol → reduction in polyester production → weakening demand for ethylene glycol, forming a negative feedback loop that suppresses further price increases.
4. Amplification of price decreases at the funding and trading levels
In the early stage, a large number of long positions were locked in a tug-of-war amid low inventories and Middle East risks; after expectations reversed, longs rushed to unwind their positions, triggering a panic‑driven sell‑off.
The rollover of the main contract from one delivery month to the next (shifting from the October contract to the November contract) has intensified short-term market volatility.
At the macro level, the U.S. dollar remains relatively strong, and overall risk appetite for commodities has declined, weighing on the energy and chemical sectors.
Ethylene Glycol Market Forecast in China
Key takeaways: Spot supply remains relatively tight, but demand is weighing on prices. In the short term, prices are likely to trade in a narrow range at elevated levels, with limited upside potential and limited room for sharp downside moves. Over the medium term, the price center of gravity is more likely to shift lower than higher, as expectations of inventory build‑up gradually materialize.
Reason: Port spot inventory remains very low, and the short-term tight balance in the spot market has not completely disappeared. The basis is strong, providing support for near-month contracts; however, with Chinese facilities continuing to increase load, expectations of import recovery in the fourth quarter, and weak polyester demand, there is a strong expectation of inventory accumulation in the far-month contracts.
Short-term market focus: whether Middle East shipping will see renewed volatility and whether polyester plant utilization rates can recover.
