Price trend:

On December 17th, the diethylene glycol market saw a slight increase. Spot prices in East China closed at 3,020 RMB/ton, up 5 RMB/ton; prices in South China closed at 3,245 RMB/ton, remaining stable.

Fundamental analysis

Supply: During this period (December 16th-22nd), Zhangjiagang is expected to receive 20,830 tons of cargo, including one domestically produced vessel. Both the quantity per vessel and the number of vessels are higher than usual during this period, leading to a significant increase in inventory pressure. As of December 16th, Fubao's inventory was 8,500 tons, and Changjiang International releases its inventory figures every Monday.

Demand: Terminal demand had not shown any improvement. The average operating rate of domestic unsaturated resin factories was 36%, a decrease of 1% compared to last week. Traders were facing pressure in terms of shipments. On December 16th, the total shipment of diethylene glycol from two storage areas in Zhangjiagang was 1,302 tons, an increase of 44 tons compared to the previous day.

Costs: Market concerns about long-term oversupply were increasing, and coupled with positive signals from the Russia-Ukraine peace talks, international oil prices had fallen to their lowest level since early February 2021, weakening cost support.

Market Outlook

International crude oil prices were weak, and the market returned to a downward trend, with domestic and imported supplies taking turns to replenish inventories. Demand remained stable, but the market lacked opportunities for adjustment. Industry participants maintained a weak sentiment, and the combination of negative sentiment and unfavorable fundamental factors makes it difficult for diethylene glycol prices to escape their low levels.

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