Introduction: Amid ongoing geopolitical tensions in the Middle East, international crude oil prices have surged significantly, providing strong support to the cost side of Diethylene Glycol (DEG). Domestic supply has decreased noticeably, with expectations of reduced import arrivals due to force majeure factors, leading to a significant overall supply reduction. Following the Spring Festival, downstream unsaturated resin and other enterprises have been steadily resuming operations. However, due to high raw material costs, the pace of capacity utilization recovery has been slower than expected, accompanied by instances of reduced loads or delayed restarts. Driven by cost pressures and reduced supply, DEG prices have risen sharply by over 130%.
Table 1: Ethylene Glycol and Related Product Price Overview (Unit: USD/barrel, USD/ton, RMB/ton)
| Product | Region/Grade | 2026/3/31 | 2026/2/28 | Change (Value) | Change (%) |
| :--------------- | :------------------ | :-------- | :-------- | :------------- | :--------- |
| WTI | Futures | 101.38 | 67.02 | 34.36 | 51.27% |
| Ethylene | Northeast Asia | 1450 | 710 | 740 | 104.23% |
| Ethylene Glycol | East China | 5275 | 3605 | 1670 | 46.32% |
| Diethylene Glycol| East China | 7470 | 3220 | 4250 | 131.99% |
| Unsaturated Resin 196# | East China | 10700 | 7800 | 2900 | 37.18% |
Data Source: chempricehub
Rising International Oil Prices Lift Cost Support
Crude Oil: In early March, international oil prices rose due to shipping disruptions in the Strait of Hormuz, which limited exports and reduced production from several Gulf countries. In mid-March, tensions in the Middle East persisted, with market news suggesting the US might increase troop presence, further escalating supply risks and pushing prices higher. In late March, concerns about escalating conflicts persisted, maintaining supply-side pressure and keeping oil prices strong. Entering April, the US expressed willingness for talks and signals of easing tensions, cooling market concerns about crude supply risks. Consequently, geopolitical support for oil prices has weakened, and international oil prices are expected to decline.
Cost Pressure Limits Downstream Load Recovery
In March, the output and capacity utilization rate of unsaturated resin increased. The domestic capacity utilization rate for unsaturated resin reached 32%, up 8 percentage points from February and 2 percentage points year-on-year. As upstream raw material costs soared, unsaturated resin producers were forced to raise prices, continuously reaching historical highs. Downstream end-user industries普遍陷入亏损 due to intensified cost pressure, forcing some enterprises to cut production or shut down, leading to a significant reduction in demand.
After the Spring Festival holiday, previously idled or under-maintenance domestic polyester plants restarted. Coupled with new plant startups and more days in the month, both monthly output and capacity utilization saw notable increases. However,剧烈波动的成本端拖累了终端需求, causing some plants to re-enter maintenance within the month, with staggered maintenance schedules, which constrained further growth in monthly output and capacity utilization.
Affected by demand drag and cost pressure, some downstream unsaturated resin and polyester plants plan to reduce output or undergo maintenance, indicating a further contraction in domestic downstream industry demand.
Force Majeure Factors Lead to Steady Decline in Port Inventory
As of March 30th, DEG port inventory in East China stood at 38,700 tons, a decrease of 13,400 tons from the end of February. Details: Zhangjiagang Changjiang International 26,000 tons; Vopak 12,700 tons; Qianhong 0 tons; Hongchuan, Taicang, Jiangyin等地无货到港. During the month, due to force majeure factors, future arriving shipments may decrease, while outbound shipments were good, leading to expectations of continued inventory drawdown.
Conclusion: In summary, with expectations of easing Middle East tensions, international crude oil prices are anticipated to retreat from highs, reducing cost-side support for DEG. From a supply-demand perspective, the tight raw material supply situation is unlikely to be resolved quickly, leading to some degree of reduction in both domestic supply and imports (mostly被动). As the traditional peak season approaches, downstream unsaturated resin and polyester enterprises are showing increased enthusiasm for raw material procurement, and operating rates are expected to continue rising. Looking ahead, while cost support may weaken, reduced supply and increased demand will provide支撑. In the short term, the DEG market is expected to maintain a strong,震荡 pattern. In April, spot prices in the East China market may operate within the high range of 6000-7000 RMB/ton. (*Monitor international crude oil prices, port inventory, and end-user订单情况, as well as recent changes in the Middle East situation.)
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