**Review of Ethylene Glycol Price Trends in 2025** The ethylene glycol (EG) market in 2025 exhibited a pattern of "strong start followed by weakness, with a low-level rebound halting the decline by year-end." The price action can be broadly divided into three phases: "high-level fluctuations in early 2025, a unilateral decline starting from late August, and a pattern of hitting new lows followed by a rebound in December." The core logic driving EG prices in 2025 was "oversupply as the dominant factor, with cost and demand providing auxiliary drivers." Before late August, the market maintained relative supply-demand balance, leading to fluctuating prices. After late August, a combination of increased supply and weak demand triggered a sustained price decline. In December, factors such as plant maintenance, rising costs, and restocking demand spurred a low-level rebound. However, the fundamental long-term structure of oversupply remained unchanged, casting uncertainty on the sustainability of the rebound. The detailed reasons for each phase of the EG market in 2025 are as follows: **Phase 1 (January-August):** The core logic was "periodic supply-demand balance + cost fluctuations as drivers." * **Jan-Mar:** Prices fluctuated upwards, supported by cost factors and restocking demand. * **Apr-Jun:** Prices declined due to the seasonal demand lull and increased supply. * **Jul-Aug:** Policy sentiment and plant maintenance pushed prices higher, but gains were capped by persistent oversupply and weak demand, ultimately resulting in range-bound fluctuations. **Phase 2 (Late August-November):** The core logic was "oversupply dominance + cost collapse compounded by weak demand as drivers." * **Late Aug-Mid Sep:** Prices fell rapidly due to concentrated commissioning of new capacities, a surge in imports, and weaker-than-expected seasonal demand. * **Late Sep-Oct:** Prices continued their downward trend, driven by a significant drop in crude oil prices leading to cost collapse, coupled with a sharp increase in port inventories. * **November:** Prices approached lows as the oversupply situation persisted, exacerbated by panic selling in the market. **Phase 3 (December):** The core logic was "exhaustion of negative factors + resonance from supply contraction, cost rebound, and restocking demand as drivers." * **Dec 1-22:** Prices hit their lowest levels since 2021, pressured by year-end corporate fund repatriation selling, delayed implementation of plant maintenance, and weak demand. * **Dec 23-31:** Prices rebounded from lows, driven by supply contraction from widespread domestic plant maintenance, a rebound in crude oil lifting costs, the initiation of polyester Spring Festival restocking, and a recovery in market sentiment. **Forecast for Ethylene Glycol Price Trends in 2026** The core logic for the 2026 EG market forecast is: "Continued supply looseness + moderate demand growth + cost-driven range-bound fluctuations, resulting in an overall pattern of initial weakness followed by stability, with range-bound volatility." From a data perspective, domestic EG capacity reached 282.25 million tons by the end of 2024. The oversupply rate is projected to remain around 35% in 2026, indicating a sustained loose supply structure. * **Q1 (Jan-Mar):** Influenced by the Spring Festival holiday, downstream polyester operating rates are expected to drop to an annual low of 70%-75%. On the supply side, BASF's new 800k ton/year facility is scheduled for commissioning early in the year. The supply-demand imbalance is likely to expand inventory accumulation pressure, potentially keeping prices range-bound at a low level of 3600-4000 RMB/ton. * **Q2 (Apr-Jun):** As downstream industries resume operations, polyester demand is expected to show marginal improvement. The planned addition of 5.55 million tons/year of polyester filament capacity in 2026 (estimated to drive EG demand by ~1.86 million tons/year) will gradually come online. Concurrently, the PTA sector enters a capacity addition vacuum with concentrated maintenance in Q2. Tight PTA supply is expected to improve sentiment across the industrial chain, easing inventory accumulation pressure. Prices are forecast to bottom out and recover to 4000-4300 RMB/ton. * **H2 (Jul-Dec):** The pace of new capacity commissioning is expected to slow. Coal prices are projected to follow a "low first, high later" trend. Multiple institutions forecast the average Brent crude price for 2026 to fluctuate within the $56-65/barrel range, providing periodic cost support. Moderate growth in domestic and international textile demand is expected to drive steady EG demand growth. The supply-demand structure is anticipated to move towards balance, with prices likely to fluctuate within the 4000-4400 RMB/ton range, making a sustained upward trend unlikely. Key variables requiring close attention include: the pace of new capacity commissioning, fluctuations in crude oil and coal prices, changes in polyester operating rates, and the effectiveness of industry "anti-involution" policies. **Forecast of Core Driving Factors for Each Quarter in 2026:** **Q1 (Jan-Mar) Core Drivers:** 1. **Supply:** Concentrated commissioning of new capacity (e.g., BASF's 800k ton unit). With average operating rates for coal-based and oil-based EG already at relatively high levels of 61.95% and 64.25% respectively in 2025, Q1 2026 rates are likely to remain at 60%-65%, limiting supply reduction and sustaining a loose supply structure. 2. **Demand:** The Spring Festival holiday will push downstream polyester operating rates down to an annual low of 70%-75%, and weaving machine rates in the Jiangsu-Zhejiang region are expected to drop to 55%-60%, resulting in weak EG demand. Historical data suggests post-holiday recovery takes 3-4 weeks. Although operations gradually resume in March, destocking is estimated at less than 50k tons for the month, offering limited support. 3. **Inventory & Sentiment:** East China port inventories reached 680k tons by end-2025. The supply-demand imbalance is expected to add 150-200k tons of inventory in Q1, prolonging the pessimistic sentiment from late 2025 and further pressuring prices. 4. **Cost:** Coal prices are expected to be weak due to seasonal demand lull post-winter heating. For crude oil, institutions forecast Q1 as the period of greatest supply-demand looseness, with Brent likely trading in the $55-60/barrel range, offering weak cost support. **Q2 (Apr-Jun) Core Drivers:** 1. **Demand:** Downstream polyester operations fully resume, with operating rates recovering to a high of 85%-90%. Gradual recovery in domestic and international textile demand will lift weaving machine rates to 70%-75%, driving marginal improvement in EG demand. Approximately 30% of the planned 5.55 million tons/year of new polyester filament capacity is scheduled for Q2 commissioning, expected to drive annual EG demand growth by 550-600k tons. 2. **Supply:** The pace of new capacity commissioning slows. The BASF unit commissioned in Q1 enters stable operation, with no other major new capacities planned. Given that oil-based EG operated at a loss for most of 2025, some high-cost units may undergo maintenance due to prior losses. Industry maintenance capacity in Q2 is estimated at 2-2.5 million tons/year, marginally easing supply pressure. 3. **Industrial Chain Linkage:** The PTA sector is in a capacity addition vacuum. Maintenance is planned for 7.2 million tons/year of PX capacity in mainland China in Q2, alongside synchronized maintenance at PTA units in East and South China. PTA industry operating rates are expected to drop to 70%-75%. Tight PTA supply is likely to improve sentiment in the polyester chain, indirectly boosting EG demand. 4. **Inventory:** Improved demand combined with supply contraction is expected to ease inventory accumulation pressure. Q2 is forecast to see destocking of 100-150k tons, gradually shifting towards inventory drawdown and supporting prices. **Q3 (Jul-Sep) Core Drivers:** 1. **Cost:** Coal prices enter an upward phase ("low first, high later"). Summer peak electricity demand and autumn heating stockpiling will push coal prices higher, providing cost support for coal-based EG. Crude oil prices may fluctuate due to geopolitics and global economic recovery pace. Institutions like Citi forecast Q3 Brent to trade in the $60-65/barrel range, dictating oil-based EG cost trends. 2. **Demand:** The terminal textile industry enters its seasonal peak season. Moderate growth in domestic and international demand should keep weaving machine rates at 75%-80%, steadily increasing EG demand. Continued release of new polyester downstream capacity is expected, with about 40% of the planned new polyester filament capacity scheduled for Q3 commissioning, driving annual EG demand growth by 750-800k tons. 3. **Supply:** Under high costs, some inefficient coal-based units (approximately 15% of total capacity with costs above 4000 RMB/ton) may reduce operating rates or undergo maintenance. Maintenance capacity is estimated at 1.8-2.2 million tons/year, suggesting potential supply contraction. Import volumes, influenced by domestic-international price spreads, may see a periodic reduction of 5%-8% if domestic prices rebound above 4200 RMB/ton, narrowing import margins. 4. **Policy:** The effects of industry "anti-involution" policies may gradually materialize. If capacity control measures are introduced, they could impact 5%-10% of total capacity, causing some disruption to market sentiment and supply. **Q4 (Oct-Dec) Core Drivers:** 1. **Demand:** The textile peak season ends, leading to a seasonal demand decline. Weaving machine rates are expected to drop to 65%-70%. Polyester producers, facing year-end fund repatriation pressures, may lower operating rates to 80%-85% and reduce raw material inventories, weakening EG demand. Monthly demand reduction is estimated at 80-120k tons. 2. **Supply:** Annual capacity additions are largely complete. The planned ~2.8 million tons/year of new capacity for 2026 is expected to be fully operational by end-Q4, stabilizing the supply structure. To meet annual production targets, plant operating rates may remain high at 65%-70%, leading to a slight increase in supply pressure. 3. **Cost:** After high-level fluctuations, coal prices may retreat as demand weakens post-autumn heating stockpiling, with an expected decline of 5%-10%. Crude oil price uncertainty remains influenced by year-end global economic expectations. Institutions like Goldman Sachs forecast Q4 Brent to retreat to the $55-60/barrel range, weakening cost support. 4. **Inventory & Capital:** Year-end fund repatriation pressures may lead traders to sell inventories at discounted prices. Combined with weak demand, Q4 is expected to see inventory accumulation of 120-180k tons, potentially triggering periodic stock builds and suppressing prices.