According to market rumors, a 1 million tons/year ethylene glycol (EG) unit in East China plans to reduce its operating rate to around 50% in February, down from the current rate of over 80%. PriceSeek’s analysis of ethylene glycol shows a long-short score of 2. The rumored reduction in operating rate at the 1 million tons/year EG unit in East China to 50% (from over 80%) is expected to cut annual supply by approximately 300,000 tons. This will significantly tighten market supply and demand, benefiting spot prices of ethylene glycol, as the supply reduction may push up spot quotations. Combined with ethylene glycol futures data, such as the Dalian Commodity Exchange’s 2602 contract (February contract) closing at 3,661 yuan/ton (down 20 yuan), current prices are under pressure. However, expectations of reduced supply are likely to support future contract prices, particularly providing upward momentum for the 2602 and 2603 contracts, which is favorable for the futures market.
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