Ethylene Glycol Prices Stabilize After Decline in January, Entering a Fluctuation Phase

In January 2026, ethylene glycol (EG) prices stopped falling and stabilized. According to data from Business Society, as of January 16, the average domestic oil-based EG price was RMB 3,808.33 per ton, down 1.45% from RMB 3,864.17 per ton on January 1.

In terms of port EG, as of the 16th, spot contracts for port EG (minimum 500 tons) were trading at a deep discount. During the first half of January, the spot contract basis remained within the range of -120 to -160. As of the close, the basis quotes were as follows:

• Next week’s contract (before December 25): -130 to -125
• Following week’s contract (before January 30): -125 to -120
• Late February contract (before February 25): -90 to -85
• Late March contract (before March 25): -40 to -35
• Late April contract (before April 25): +5 to +10

Domestic coal-based polyester-grade EG spot prices (bulk, tax-included, ex-works) for full truckloads ranged from RMB 3,240 to 3,380 per ton.

For imported EG, as of January 16, recent negotiations for near-term vessel cargoes were around USD 441–443 per ton CFR.

Port Inventory Changes in January 2026:
As of January 15, EG spot inventory at East China’s main ports totaled 728,000 tons, an increase of 68,500 tons from 659,500 tons on December 29. Port inventories began accumulating in early October 2025, peaking in mid-December at 755,000 tons (up from 355,000 tons), before declining to 628,000 tons in mid-December.

Analysis of Reasons for EG Price Stabilization and Fluctuation in January:
In the first half of January 2026, EG prices stabilized after a decline, driven by a tug-of-war between cost support, short-term supply disruptions, seasonal demand weakness, high inventories, and new capacity releases. Spot prices fluctuated narrowly within the range of RMB 3,650–3,850 per ton, without a clear unilateral trend.

1. Cost Support and Volatility – Forming a Price Floor

   • Crude Oil Price Fluctuations: International oil prices fluctuated in January due to geopolitical tensions in the Middle East and South America. As a key cost component for EG, this provided intermittent support and limited price declines.
   • Relatively Stable Coal Prices: Coal-based EG accounts for a significant portion of domestic capacity. Although coal prices fluctuated, they did not experience a sharp decline, providing some floor support for EG prices. However, coal-based EG remains in a loss-making position, limiting the strength of cost support.

2. Supply Side: Short-Term Contraction Coexists with Long-Term Easing – Intensified Bull-Bear Battle

   • Overseas Plant Maintenance and Disruptions: Taiwan’s Nan Ya shut down two units with a combined capacity of 720,000 tons/year. Some Middle Eastern plants reduced operating rates or underwent maintenance due to cost or geopolitical factors, temporarily reducing imports and easing supply pressure.
   • Domestic New Capacity and Plant Restarts: An 800,000-ton/year new plant in South China started up in early January, and new units such as BASF Zhanjiang commenced operations. Previously idled plants gradually resumed production, maintaining overall domestic operating rates above 70%. Supply increases are evident, with strong expectations for long-term easing.
   • Persistent Port Inventory Accumulation: EG inventories at East China ports continued to rise, with high stock levels suppressing price rebounds.

3. Demand Side: Seasonal Weakness and Upcoming Spring Festival – Underpinned by Rigid Demand but Lacking Incremental Growth

   • Clear Seasonal Weakness in the Polyester Industry: As the Spring Festival approaches, downstream polyester enterprises entered their traditional off-season. Operating rates of weaving machines in Jiangsu and Zhejiang fell to around 56%, and polyester operating rates gradually declined. Additionally, nearly 10 million tons of polyester capacity are scheduled for maintenance shutdowns in February, indicating strong expectations for demand contraction.
   • Rigid Demand Support: The polyester industry still has some rigid demand, with some enterprises stocking up before the holiday, providing some support to EG prices and preventing sustained sharp declines.

4. Market Sentiment and Expectations: Mixed Factors Make It Difficult to Break the Fluctuation Pattern

   • Geopolitical Tensions: Conflicts in the Middle East and South America raised concerns about supply stability, driving intermittent price rebounds. However, as conflicts did not escalate further, the support was limited.
   • Approaching Spring Festival Holiday: Market participants adopted a wait-and-see attitude. Traders were actively selling, while buying interest was moderate. The basis for near-term cargoes weakened, leading to wide price fluctuations.