Introduction: Tensions in the Middle East have kept oil prices strong, while downstream demand has shown some recovery, pushing market sentiment higher. However, due to poor price transmission, the downstream sector lacks sustained momentum for chasing price increases, limiting the rebound.

Figure 1: 2025-2026 Domestic Diethylene Glycol Market Spot Price Trend (CNY/tonne)

Source: chempricehub Intelligence

Recently, due to an increase in phased arrivals and slow port unloading, inventories at major ports have been accumulating continuously. However, tensions in the Middle East have heightened concerns about supply disruptions, leading to strong expectations of inventory drawdown at ports. Additionally, after the May Day holiday, operating rates for downstream unsaturated polyester resins have increased, improving demand-side sentiment. Following a sustained decline, bargain hunting has picked up, causing the spot market price in East China to rebound from lows. As of May 15, the East China spot market closed at 6,770 CNY/tonne.

Figure 2: Trend Chart of Operating Rates for Diethylene Glycol and Downstream Sectors (Unit: %)

Source: chempricehub Intelligence

Driven by the concentrated restart of major production facilities after the May Day holiday, market supply has gradually increased. Domestic unsaturated polyester resin supply has risen, with the operating rate climbing to 36%, up 16 percentage points from the previous period. China's polyester industry average weekly operating rate stood at 81.1%, an increase of 0.03 percentage points from the prior week. During the week, some long-idle units restarted, and previously overhauled plants increased loads, such as Tiansheng, Dafa, and Shidai; Huilong’s new facility also contributed to capacity. On the flip side, some plants reduced output, such as Huahong and Xinfengming. Overall, the supply level in the polyester industry rose slightly, with domestic polyester production increasing modestly during the week.

Figure 3: Weekly Trend of Diethylene Glycol Inventories at Major Ports (Unit: tonnes, 10,000 tonnes)

Source: chempricehub Intelligence

This week, diethylene glycol port inventory in East China stood at 21,100 tonnes, up 3,100 tonnes from the previous period. Details: Zhangjiagang Changjiang International 13,000 tonnes, Fubao 8,100 tonnes. From May 7 to May 13, total shipments from East China's major ports (Changjiang International and Fubao warehouses) amounted to 5,615 tonnes, with an average daily shipment of approximately 802 tonnes. Based on the expected arrivals at the port, only 770 tonnes of imported cargo are scheduled to arrive at the major ports in the near term. Combined with recent shipment data, a strong inventory drawdown is expected next week.

In the short term, although demand-side performance has fallen short of expectations and the market lacks momentum for chasing price increases, domestic supply remains tight. Imports are weak and domestic production is expected to decrease, keeping East China's major port inventories at low levels. Moreover, downstream feedstock inventories are generally low, with most purchases made on a need-to basis. Given the tight supply and rigid demand, holders are reluctant to sell at low prices. The East China diethylene glycol market is likely to experience relatively strong fluctuations.