According to China Energy Network, the domestic ethylene glycol industry has transitioned from a phase of capacity expansion to a period of deep adjustment toward supply-demand rebalancing. Facing a fundamental landscape characterized by “high supply, weak demand, and high inventories,” the ethylene glycol futures contract 2601 has been on a steady downward trajectory since September this year, with prices gradually shifting downward. Entering November, the 2601 contract broke below the 4,000 RMB/ton psychological threshold, hitting a low of 3,853 RMB/ton. Ethylene glycol futures prices are expected to continue their weak oscillation trend.
On the supply side, domestic ethylene glycol capacity continues to expand, accumulating supply pressure. As of the week ending November 13, the capacity utilization rate of domestic ethylene glycol producers stood at 66.00%, a slight increase of 0.12 percentage points from the previous week. Among these, ethylene-based ethylene glycol producers recorded a capacity utilization rate of 68.04%, a modest rise of 2.4 percentage points week-on-week, while coal-based ethylene glycol producers saw a capacity utilization rate of 62.58%, a slight decrease of 3.7 percentage points week-on-week. Consequently, total domestic ethylene glycol production for the week ending November 13 reached 413,700 metric tons, a marginal increase of 800 metric tons week-on-week.
Currently, ethylene glycol plant capacity utilization remains at relatively high levels for the year. By 2025, China's total ethylene glycol production capacity has surpassed 29.8 million metric tons. The commissioning of Shandong Yulong's 900,000-metric-ton facility has further heightened market expectations for increased supply. Although some facilities, such as Shenghong Refining and Chemical and Zhengda Kai, are scheduled for maintenance, the new capacity far exceeds the short-term reduction caused by maintenance, leading to a persistently relaxed overall supply-demand balance.
Furthermore, while overseas supply has decreased due to shutdowns at some U.S. facilities and low operating rates at Saudi Arabian plants, keeping import volumes at relatively low levels, China's significantly improved self-sufficiency rate for ethylene glycol has substantially weakened the impact of imports on the market.
In stark contrast to supply growth, downstream demand remains sluggish, offering minimal support to prices. Approximately 95% of ethylene glycol consumption is concentrated in the polyester industry, whose demand conditions directly dictate EG price trends. Recently, textile market orders for the “Double Eleven” shopping festival have largely been fulfilled, with subsequent order flow showing clear signs of weakness. Market expectations for the future remain generally cautious. Fabric merchants are primarily focused on inventory digestion, with low purchasing enthusiasm. Foreign trade orders and large spring/summer orders for next year are scarce, with small-batch rush orders dominating. Some factories plan to reduce production after completing orders, reflecting an overall conservative market sentiment and cautious outlook on order recovery. Insufficient order follow-through at the end-user weaving stage has kept weaving enterprises' order backlog days at low levels. Most companies are focused on clearing existing inventory and fulfilling old orders, showing weak purchasing intent for polyester products. According to Longzhong Information data, domestic ethylene glycol demand for the week ending November 13 stood at 552,200 tons, down 0.31% week-on-week.
The most direct manifestation of this supply-demand mismatch is the continuous accumulation of port inventories. Entering November, ethylene glycol inventories at major ports in East China have steadily climbed. As of the week ending November 13, total MEG inventory at major East China ports reached 618,000 tons, a slight increase of 13,000 tons week-on-week. This rapid inventory buildup stems partly from sustained domestic production growth and partly from concentrated recent arrivals coupled with insufficient downstream receiving capacity. With new facilities stabilizing output and additional arrivals scheduled, the trend of ethylene glycol inventory accumulation is unlikely to reverse. High inventory levels will become the core factor suppressing prices.
In summary, the domestic ethylene glycol market currently maintains expectations of inventory accumulation. On one hand, supply remains at a high level for the year, with stable overseas plant operations and minimal fluctuations in imports, resulting in a significant overall increase in supply. On the other hand, terminal demand remains weak, with expectations of a decline in the comprehensive operating rate of downstream polyester plants and a slowdown in corporate procurement pace. Therefore, domestic ethylene glycol prices are expected to trend weaker in the near term.
As an integrated internet platform providing benchmark prices, on November 20, the benchmark price of ethylene glycol on SunSirs was 4101.67 RMB/ton, a decrease of 2.82% compared with the beginning of the month (4220.83 RMB/ton).
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