At the end of the year, diethylene glycol inventories at port warehouses were significantly higher than in the same period in recent years. Under this trend, the accumulation of inventory at ports after the Spring Festival may become even more severe. Coupled with the planned start-up of new facilities in South China in January, the supply side will continue to face pressure, while demand remains weak due to the off-season. With bearish sentiment dominating the market, diethylene glycol prices are likely to continue to decline.

Port inventories were higher than the same period last year

At the end of the year, inventories at East China ports were significantly higher than in the same period last year. As of December 22nd, the total inventory at Fubao and Yangtze River ports in East China was 49,700 tons, 17,300 tons higher than the same period last year, representing a year-on-year increase of 53%; compared to 29,800 tons in the same period of 2023, the increase was 149.75%.

According to statistical data, inventory levels in December 2025 showed a significant increase compared to the same period in the previous two years, and this trend of year-on-year increase has been observed in recent years. Inventory levels after the Spring Festival in 2023-2025 all showed a significant increase compared to the end of the previous year. Considering the current inventory levels at East China ports, the current demand situation, and the fact that this year's Spring Festival is later than last year's, a conservative estimate suggests that inventory in East China after the 2026 Spring Festival may reach around 87,000 tons, potentially reaching a new high.

Supply pressure is unlikely to ease in the short term

Based on a comparison of domestic diethylene glycol (DEG) plant operating rates over the past three years, the domestic DEG industry saw a significant increase in operating rates in the third quarter of 2025, and even surged to over 76% in the fourth quarter. This was mainly due to the fact that most of the previously shut-down plants resumed normal production at the end of the third quarter and the beginning of the fourth quarter, and the new plant of Yulong Petrochemical in East China officially started production in mid-September and subsequently operated stably. Although some plants, such as those of Quanzhou Sinochem, Shenghong Refining & Chemical, and Ningbo Fude, underwent maintenance in the fourth quarter, and Hainan Refining & Chemical and Sanjiang Chemical operated at reduced capacity, and some plants experienced short-term shutdowns to alleviate supply pressure, the domestic DEG operating rate remained at a relatively high level throughout the year. As of December 22nd, the domestic DEG industry operating rate was still around 70%. Furthermore, Zhanjiang BASF is scheduled to officially start production in January, which will further increase domestic supply.

The trend of weakening demand is irreversible

In contrast, the main downstream industries of diethylene glycol, namely unsaturated resins and polyester, are experiencing weak overall support due to sluggish end-user demand.  With the Lunar New Year approaching, if downstream industries experience insufficient order follow-up, there is a possibility of early shutdowns and holidays. The weakening trend in diethylene glycol demand at the end of the year is irreversible, coupled with the frequent price drops in the diethylene glycol market, which has repeatedly damaged market confidence.  Considering the accumulation of inventory at ports and the expectation of increased domestic supply, downstream players are hesitant to purchase, fearing further price declines and potential losses. Therefore, downstream buyers are becoming increasingly cautious, lacking confidence in building up inventory, which may further lead to a decline in demand.

Conclusions

Considering the overall supply and demand dynamics and market sentiment, the high port inventory at the end of the year makes it highly likely that inventories will accumulate to high levels after the Spring Festival.  This, coupled with the trend of strong supply and weak demand for diethylene glycol domestically before and after the Spring Festival, and the current continuous decline in diethylene glycol prices leading to unstable market sentiment and increasingly pessimistic expectations among market participants regarding the bottom price, suggests that domestic diethylene glycol prices will likely remain under pressure until the Spring Festival, with significant downside risk. It is recommended to pay close attention to the operating status of ethylene glycol plants, changes in diethylene glycol port inventory, and the operating conditions of downstream industries.

As an integrated internet platform providing benchmark prices, on December 23rd, the benchmark price of diethylene glycol according to SunSirs was 3,326.67 RMB/ton, a decrease of 3.11% compared to the beginning of the month (3,433.33 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.