Lead: The domestic diethylene glycol (DEG) market has recently experienced a surge followed by a decline. As of July 16, the price of DEG in East China stood at 9,070 yuan/ton, up 870 yuan/ton week-on-week, an increase of 10.55%, with a cumulative monthly rise of 22.82%.
Recently, there have been no imported arrivals at the ports, and inventories at major ports have continued to decline, tightening spot market liquidity. Additionally, tensions in the Middle East and generally strong sentiment across commodities have supported sustained price strength during the week. However, within the cycle, previously idled units have been restarted, leading to a continuous increase in domestic supply. Downstream demand has been insufficient to provide support, and there is resistance to high prices. The price transmission along the industrial chain has been hindered. Towards the end of the week, prices began to soften, narrowing their gains.
Recently, inventories at major East China ports have been continuously declining. As of the week ending July 13, inventory at major ports fell to a historically low level of 0.43 million tons. Cargoes from Canada, Taiwan, Saudi Arabia and other regions have been arriving recently. According to incomplete statistics, approximately 16,000 tons of DEG are expected to arrive at various ports in East China by the end of the month, which will effectively alleviate the tight spot supply situation.
In the short term, the DEG market will gradually face downward pressure. With increased port arrivals expected soon and the restart of Gulei Petrochemical in South China, which will release product in the coming days, major port inventories are expected to accumulate. The tightness in spot supply is likely to improve for the time being. Furthermore, the order situation downstream is not ideal, hindering purchasing enthusiasm. Therefore, it is expected that the DEG market will continue to face pressure going forward.
Top 5 DEG production capacity of representative enterprises:
| Enterprise Name | Capacity: 10,000 tons/year |
|---|---|
| Zhejiang Petrochemical | 19 |
| Shenghong Refining & Chemical | 15.5 |
| Satellite Petrochemical | 15 |
| Hengli Petrochemical | 15 |
| Zhenhai Refining & Chemical | 13 |
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