I. 2025 Trade Landscape: Simultaneous Growth in Import Volume and Structural Decline in Reliance

By 2025, China's ethylene glycol trade will exhibit a pronounced “volume up, quality down” trend. Customs data shows cumulative imports from January to October reached 6.3 million tons, up 16.2% year-on-year, with Saudi Arabia as the primary source country accounting for over 53% of total imports. Despite continuous expansion of domestic production capacity, maritime transport demand remains notably inelastic. However, contrasting with import volume growth, China's domestic ethylene glycol import dependency has declined to around 30%, reflecting the deepening substitution effect of domestic capacity expansion.

(1) Divergence in Import/Export Volumes and Prices, and Evolution of Trade Methods

The price gap between ethylene glycol imports and exports continued to widen in 2025. The average import price in the first half of the year was approximately $536.46 per ton, with a monthly average of $515.86 in June. Meanwhile, the average export price reached $588.06 per ton, resulting in a price differential exceeding $70 per ton. Although export volumes remained low (approximately 72,300 tons from January to June 2025, down 22.83% year-on-year), the significant price differential indicates that domestically produced high-end ethylene glycol possesses international competitiveness. In terms of trade methods, general trade accounted for 54.28% of total imports, processing trade for 25.12%, and bonded supervision area goods for 20.60%. This indicates that the industrial chain has both direct production needs and retains flexibility for re-export trade.

(2) Regional Import Pattern Reshaping

The East China region remains the core of imports. In June 2025, Zhejiang imported 277,400 metric tons (44.9% share) and Jiangsu imported 162,900 metric tons (26.4% share), with the two provinces collectively accounting for over 70%. This closely aligns with polyester production capacity distribution—Jiangsu and Zhejiang consume 80% of China's ethylene glycol but only account for 30% of domestic production capacity. This significant supply-demand gap sustains their role as trade hubs. Notably, coal-based EG production bases like Shandong and Henan are transitioning into exporting provinces. By 2025, Shandong's export share reached 49.68%, signaling a shift in domestic capacity from “import-driven” to “export-oriented.”

II. Import Sources: A Diversified Substitute System Dominated by the Middle East

By 2025, China's EG imports exhibit a “one dominant player with multiple alternatives and dynamic adjustments” pattern, where geopolitics and economics reshape the supply landscape.

(1) Middle East Maintains Core Supplier Status

Saudi Arabia holds absolute dominance with over 53% market share. Leveraging cheap ethane feedstock, it boasts the world's lowest production costs, and its supply stability directly impacts the domestic market. However, frequent geopolitical conflicts in the Middle East in 2025 disrupted supply. In late June, Saudi Arabia's SHARQ facility unexpectedly shut down due to a power failure. Three of its four ethylene glycol units restarted by late July, while one remains offline. Iran's facilities experienced intermittent shutdowns due to the Iran-Israel conflict. Although operations resumed in early July, this disrupted July shipment plans by 40,000-50,000 tons. Additionally, Singapore's Aster ethylene glycol facility underwent maintenance in August to align with upstream cracker unit inspections. These disruptions caused East China's imports to plummet 55% month-on-month in May, with sharp declines in arrivals at Zhangjiagang and Taicang ports, directly driving port inventories to historic lows.

(2) North American Supply Severely Hit by Tariff War

The United States and Canada are traditional suppliers of ethylene glycol to China, accounting for 14.78% and 13.16% of China's imports in Q1 2025, respectively. However, after the U.S. initiated global tariffs in April, China imposed 34% tariffs on U.S. imports, causing U.S. EG imports to plummet starting in May. With no alternative markets for U.S. EG (China accounts for over 50% of its exports), market participants fear U.S. producers may be forced to reduce operating rates. Although Canada is not on the anti-dumping list, its second-quarter arrivals also showed a downward trend due to the impact on the overall North American supply chain. This policy shock triggered a noticeable shift in import sources, with Middle Eastern and Asian supplies rapidly filling the gap. The trend is now established: driven by both the rapid increase in domestic self-sufficiency rates and the imposition of tariffs on U.S. imports, the continued sharp decline in U.S. and Canadian EG exports to China is a definitive market consensus. The impacts differ: U.S. supplies face direct policy shocks, while Canadian supplies are more affected by indirect impacts from supply chain disruptions and trade flow shifts.

(3) Role Shift in Near-Sea Asian Regions

Taiwan represents a significant variable. Multiple local plant maintenance in 2024 caused a decline in exports to mainland China, but plants gradually resumed operations in the second half of 2024, with imports gradually recovering in Q1 2025. From January to June, Taiwan's stable plant operations drove a 44% increase in imports, effectively supplementing supply. Malaysia's PRefChem facilities operated stably, partially offsetting losses from the Middle East. Additionally, Brunei surpassed Taiwan as the third-largest import source in January-February, signaling the rise of Southeast Asian production capacity.

(4) Emerging Substitute Forces Emerge

Oman and Kuwait emerged as prominent incremental sources for 2025. August data showed Saudi Arabia's supply decreased by 94,000 tons year-on-year, while Oman's imports surged by 34,000 tons to 51,000 tons and Kuwait's increased by 16,000 tons to 47,000 tons. This “give-and-take” adjustment mechanism ensured overall supply stability and reflected the flexibility of China's import strategy.

III. Maritime Logistics System: Port Agglomeration and Efficiency Challenges

(I) Differentiation of Core Port Functions

1. Yangtze River Delta Port Cluster: Absolute Hub Status

• Zhangjiagang: China's largest ethylene glycol unloading port, featuring specialized terminals like Changjiang International and Fu Bao. 80% of berths accommodate 50,000-ton vessels. Inventory fluctuations serve as a bellwether for national pricing. Its “ship-in, truck-out” model accounts for 85% of operations, primarily serving polyester enterprises like Chengxing Group and Hailun Petrochemical.

• Taicang: Yanghong Terminal and Changjiang Petroleum Terminal primarily handle 50,000-80,000 DWT vessels, serving both distribution and transshipment functions. Despite a 55%+ decline in arrivals during May-June 2025 due to reduced Saudi and Canadian supplies, it remains East China's vital spot market hub.

• Ningbo: Serves Zhejiang Petrochemical's integrated refining and petrochemical project via Zhoushan Port. Data shows East China port inventories fell from 547,100 tons in June to 475,000 tons by late July, indicating a destocking phase. During this period, Ningbo Port maintained relatively active daily shipments (3,800 tons), demonstrating its role as a regional reserve base.

2. South China Port Cluster: Emerging Growth Hub

• Yangpu Port: Accounts for 46.8% of Hainan's total. The Hainan Yisheng Petrochemical PTA/PET project requires substantial annual imports of ethylene glycol. Its strategic location at the Singapore-Hong Kong-Shanghai main shipping route makes it a pivotal hub serving Southeast Asian markets.

• Meizhou Bay Port: In August 2025, it handled its first foreign trade ethylene glycol shipment when the Haiyan No. 1 vessel, carrying 6,152 tons, berth at the Douwei Port Area. This marked a more convenient raw material channel for Fujian's petrochemical clusters (Sinopec United Petrochemical and Gulei Petrochemical).

(II) Maritime Scale and Vessel Characteristics

In 2025, China's ethylene glycol maritime transport market exhibited characteristics of “high import volumes, stable route structures, and balanced shipping capacity supply and demand.”

1. Transport Structure and Route Distribution

As a bulk liquid chemical, ethylene glycol is primarily transported via specialized chemical tankers (Type 3 vessels) compliant with the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (BCS). Core routes center on Middle East-East China and North America-China, with Saudi Arabia, Canada, Oman, and the United States collectively accounting for over 90% of origin.

2. Market Operation Characteristics

2023 benchmark data shows China imported 7.095 million tons of ethylene glycol by sea, involving 274 vessels and 424 voyages, with an average discharge volume of 8,814 tons per voyage. By 2025, as import volumes grow, voyage frequency is projected to increase by approximately 15% year-on-year. Vessel types are predominantly 30,000-50,000 DWT chemical tankers, accounting for over 80% of terminal tonnage capacity.

3. Import Shipping Trends

With domestic coal-based EG production capacity utilization rising to a high of 85%, import substitution effects will continue to strengthen. However, the competitive advantage of low-cost Middle Eastern cargo sources will sustain seaborne import volumes. Key risk factors include: geopolitical disruptions (e.g., shutdown risks at Iranian facilities) potentially affecting route stability, and rising demurrage costs due to elevated port inventories. The imported EG seaborne market will maintain a development trajectory characterized by “stable volume, optimized structure, and enhanced efficiency.”

4. Domestic EG Seaborne Market

By 2025, China's domestic EG seaborne trade will exhibit distinct “north-to-south transportation and regional complementarity,” forming a triangular transport network centered on the Bohai Rim, Yangtze River Delta, and Pearl River Delta.

1). Regional Flow Patterns

Shipping volumes from North China, East China, and South China account for approximately 30%, 35%, and 35% respectively. North China serves as the primary supply base, with major refining and petrochemical enterprises like Dalian Hengli and Shenghong Petrochemical producing millions of tons of ethylene glycol annually. Of this output, 30%-40% is consumed within North China, 60%-70% is shipped to the East China market, and 5%-10% flows to South China. Primary shipping ports include Dalian, Jinzhou, and Bayuquan, with direct routes to Yangtze River estuary ports such as Shanghai, Ningbo, Taicang, Jiangyin, and Nantong.

East China serves as both a key production hub and core consumption market. Output from enterprises like Zhejiang Petrochemical is primarily absorbed locally and in surrounding areas, while also receiving substantial shipments from North China. Notably, with the rapid expansion of polyester capacity in northern Jiangsu, domestic transshipment tank capacity in Jiaxing and Nantong has significantly increased, while the share of traditional tank farms in Zhangjiagang has declined, leading to a diversification in cargo flow patterns. The South China region is dominated by producers such as Sinopec Shell and Huayi Qinzhou, with annual shipments exceeding one million tons. Supply sources include both regional internal production and maritime adjustments.

2). Transport Scale and Modes

Domestic seaborne ethylene glycol transshipment reached 4.837 million tons in 2023, involving 916 voyages with an average of 5,189 tons per voyage. Domestic trade volume is projected to grow to 5.2 million tons by 2025, primarily driven by increased demand for “West-to-East” transportation of domestically produced coal-based ethylene glycol. By 2025, coastal ports like Meizhou Bay Port will complete channel upgrades, enabling 5,000-ton chemical tankers to navigate all tides. This will increase maximum cargo capacity per voyage to 7,500 tons, effectively reducing logistics costs.

The primary vessel types will be 3,000-10,000 dwt chemical tankers, with 6,000 dwt vessels accounting for approximately 50% of the fleet. Leading shipping companies like China Merchants South Oil operate domestic routes covering the entire coastal region and the middle-to-lower reaches of the Yangtze and Pearl Rivers, forming a transportation network that spans major chemical industry bases.

3). New Flow Characteristics in 2025

Amid the trend of domestic substitution for imports, domestic seaborne demand for ethylene glycol continues to grow, driving up turnover rates at transshipment terminals and increasing delivery proportions at ports in Taicang and northern Jiangsu. As polyester production capacity shifts to emerging regions like northern Jiangsu, the traditional pricing system centered on Zhangjiagang is undergoing adjustments, leading to a more decentralized layout of domestic delivery terminals. Annual maritime flows will maintain a pattern of “primarily North China → East China, supplemented by South China self-supply,” while emerging production areas will drive increased short-haul transportation volumes in surrounding regions.

(3) Port Inventory and Efficiency Dynamics

Port ethylene glycol inventories in 2025 fell to historic lows. Spot liquidity in certain tank farms became extremely tight. Inventory declines stemmed primarily from sluggish May arrivals (approximately 550,000 tons) coupled with sustained downstream polyester plant withdrawals. Zhangjiagang led inventory reductions, accounting for 30% of the national decrease.

Ship delays and port congestion become routine: The Red Sea crisis forces some routes to detour via the Cape of Good Hope, adding 7-10 days to voyages; typhoon season (July-September) may cause 3-5 days of port closures in East China. Furthermore, tank utilization consistently exceeds 85%, while lengthy approval cycles for new tank capacity at major ports like Zhangjiagang and Taicang constrain turnover efficiency.

(4) Transportation Modes and Cost Structure

Marine transportation of ethylene glycol typically follows the “ship-in, truck-out” model: after large ocean-going vessels berth, cargo is distributed to downstream factories via pipelines, tank trucks, or smaller vessels (transshipment). Major enterprises along the Yangtze River, such as Chengxing Group, Hailun Petrochemical, and Shuangliang Group, often locate their factories near ports to enable direct pipeline supply of raw materials. The premium/discount factor C in pricing formulas explicitly incorporates “logistics costs,” reflecting the direct impact of shipping expenses on spot prices.

IV. Policy and Geopolitical Risks: Supply Chain Vulnerability and Resilience

(1) US-China Tariff War Disrupts Supply Chains

In April 2025, China imposed a 34% tariff on US ethylene glycol, fundamentally altering trade flows. Import costs for U.S. supplies became significantly higher than those from the Middle East and domestic sources, leading to a precipitous decline in imports starting mid-May. As China is the world's largest EG importer, U.S. producers struggled to find alternative markets and were forced to reduce production. This policy passively increased the import share from the Middle East and Canada but also heightened supply concentration risks.

(2) Ripple Effects of Middle East Geopolitical Conflict

Iranian facilities experienced temporary shutdowns due to the Iran-Israel conflict. While port operations remained normal, suppliers increased shipment volumes, diverting cargo to China. A power failure at Saudi Arabia's SHARQ facility caused four units to shut down, impacting July supply. These events highlight the transmission pathway of Middle East geopolitical risks through the EG supply chain: conflict → facility shutdowns → shipment delays → reduced arrivals at Chinese ports → inventory drawdowns → price hikes.

(3) Tightening Environmental and Regulatory Policies

Though not classified as hazardous chemicals, EG falls under liquid chemical products requiring compliance with multiple maritime regulations. Shanghai Port mandates direct loading for Category 3 hazardous goods, necessitating transfer via Yangshan Hazardous Goods Warehouse—adding operational steps. Ports along the Yangtze River have raised vessel emission standards, forcing the phasing out of older chemical tankers. Concurrently, insufficient tank capacity causes port congestion, while lengthy environmental approval cycles constrain infrastructure expansion.

(4) Continued Anti-Dumping Policies

China's anti-dumping measures against US and EU ethylene glycol/dibutyl glycol monobutyl ether imports remain in effect, with a review investigation scheduled for 2025 and potential tariff increases. This has largely driven high-cost US and EU supplies out of the Chinese market, creating space for Saudi, Canadian, and domestically produced coal-based ethylene glycol. However, these measures also limit import diversification, increasing supply chain risks.

V. Supply-Demand Fundamentals: The Tug-of-War Between Capacity Expansion and Weak Demand

(I) Supply Side: Accelerated Domestic Substitution

By the end of 2025, China's total domestic EG capacity is projected to reach 30.23 million tons, an increase of 1.6 million tons from 2024, representing a 6% growth rate. New capacity includes projects such as Yulong Petrochemical's 800,000 tons/year (commissioned in Q3), Lianyungang Petrochemical, and Sinochem Quanzhou. In the second half of the year, the utilization rate is projected to rebound to over 65% with the August restart of Zhejiang Petrochemical's cracker and the commissioning of Yulong Petrochemical's new facility.

The share of coal-based EG capacity continues to rise. However, product quality differences limit its application primarily to mid-to-low-end polyester production, while high-end polyester still relies on imported petroleum-based EG. This structural imbalance means that despite import dependency falling to 30%, critical raw materials remain reliant on imports.

(II) Demand Side: Declining Polyester Industry Sentiment

Over 90% of ethylene glycol demand originates from the polyester sector. From January to June 2025, textile and apparel exports totaled $144 billion, growing only 0.4% year-on-year. Domestic retail sales of clothing and footwear reached CNY742.59 billion, up 3.1% year-on-year. Declining operating rates in end-user weaving and texturing plants have accumulated inventory pressure at polyester factories, with operating rates continuously falling since June. Further reductions in polyester operating rates in the second half of the year will negatively impact ethylene glycol demand.

(III) Cost and Price Transmission

Ethylene glycol prices are driven by three factors: upstream energy costs, midstream inventory levels, and downstream demand. In the first half of 2025, the average import price was $536/ton, while the cost of domestically produced coal-based EG was approximately ¥4,200/ton. Port inventories stood at around 530,000 tons by late June, but weak demand capped upward potential. The settlement price = benchmark price × K + C, where K is the credit period coefficient and C includes logistics costs, brand premiums, and regional price differentials, allowing ocean freight costs to directly impact end-user prices.

VI. Future Trends: From Passive Acceptance to Active Shaping

(I) Reconfiguration of Trade Flows

From 2025 to 2026, China's ethylene glycol trade will transition from a “single import” model to a diversified approach encompassing “imports + re-exports + domestic trade.” As domestic production capacity increases, import growth will slow, with import dependency projected to fall below 25% by 2026. Hub ports like Zhangjiagang will continue playing a pivotal role, enhancing global resource allocation capabilities.

(2) Collaborative Upgrading of Port Clusters

• Yangtze River Delta: Deepen coordination among Zhangjiagang, Taicang, and Ningbo ports to share tank capacity and vessel schedule information, establishing a global ethylene glycol pricing center.

• South China: Centering on Yangpu, Meizhou Bay, and Huizhou, serve petrochemical clusters in Guangdong, Fujian, and Hainan while extending reach to Southeast Asian markets.

• Bohai Bay: Tianjin and Dalian ports will enhance handling capacity for 50,000-ton vessels, reduce transshipment steps, and serve Beijing-Tianjin-Hebei and Northeast China markets.

(3) Digital and Intelligent Transformation

Blockchain bills of lading, IoT-based tank capacity monitoring, and big data-driven vessel schedule forecasting will reduce logistics costs by 5-10% while enhancing supply chain transparency. Intelligent scheduling systems will optimize vessel berthing times to alleviate port congestion.

(4) Green and Low-Carbon Transition Challenges

Under the dual carbon goals, the high carbon intensity of coal-based ethylene glycol production becomes a significant disadvantage. Carbon reduction requires technologies like carbon capture and green hydrogen substitution. In maritime transport, the IMO's 2023 Carbon Intensity Indicator (CII) drives adoption of LNG-powered or methanol-fueled chemical tankers, increasing retrofitting costs but enhancing long-term competitiveness. Bio-based ethylene glycol technology is maturing and may form a new trade category in the future.

(5) Financialization and Risk Management

EGL futures have become a vital risk management tool. The Dalian Commodity Exchange contracts require a minimum margin of 5%, gradually increasing to 20% before the delivery month. By 2025, heightened import volatility will boost corporate hedging demand. However, basis risks between futures and spot markets, as well as between domestic and international trade, warrant continued attention. The rising proportion of RMB settlements will mitigate exchange rate risks and strengthen the influence of the “China price.”

VII. Conclusions and Recommendations

China's ethylene glycol trade and shipping system faces a historic inflection point in 2025: rapid import growth coexists with a structural decline in dependency; the Middle East maintains its core supply role while North America withdraws; low port inventories resonate with capacity expansion; and geopolitical risks intertwine with policy regulation. This complex landscape imposes heightened demands on industry participants:

3. Importers: Establish a diversified supply system encompassing the Middle East, Asia, and emerging markets; utilize futures instruments to hedge price risks; monitor geopolitical risk alerts in regions like Iran and Saudi Arabia.

4. Logistics Providers: Invest in digital platforms to enhance vessel scheduling and port operation efficiency; proactively expand into emerging ports such as Yangpu and Meizhou Bay.

5. Producers: Coal-based EG manufacturers must elevate product quality to narrow the gap with imported petroleum-based products; simultaneously leverage cost advantages to expand export markets.

6. Policy makers: Must balance supply chain security with trade facilitation, seeking optimal solutions between anti-dumping measures and import diversification; expedite approvals for specialized chemical terminals along the Yangtze River to alleviate storage capacity bottlenecks.

Looking ahead, China's EG industry will transition from “scale expansion” to “quality enhancement and global pricing power competition.” With capacity exceeding 30 million tons by late 2025, China will not only meet domestic demand but also participate in global resource allocation through re-export trade and technology exports.

The maritime transport system will evolve from a “one-way import channel” into a “two-way circulation hub,” playing a more pivotal role in global chemical trade. Though this transition may involve growing pains, it will ultimately propel China from a major producer to a dominant force in the ethylene glycol sector.

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