After declining in December, the price of ethylene glycol stabilized and stopped falling

In December, the price of ethylene glycol trended downwards, but recently the price has stabilized. According to data from SunSirs, as of December 30th, the average domestic price of oil-based ethylene glycol was 3,864.17 RMB/ton, a decrease of 4.59% compared to the average price of 4,050 RMB/ton on December 1st.

In the port ethylene glycol market, the basis for port ethylene glycol spot contracts (starting from 500 tons) was trending weaker. The futures contract has switched from the 2601 contract to the 2605 contract. As of the close of trading, the basis quotes for next week's contract (before January 9th) were -137 to -133, for the following week's contract (before January 16th) were -125 to -122, for the end of January contract (before January 25th) were -116 to -111, for the end of February contract (before February 25th) were -81 to -75, and for the end of March contract (before February 25th) were -43 to -40.

The domestic spot price for coal-based polyester-grade ethylene glycol (bulk, tax included, ex-factory) was 3,280-3,360 RMB/ton for full truckload deliveries.

Regarding overseas ethylene glycol, as of December 29th, recent shipments were being negotiated and traded at around $441-445 per ton (CIF).

Ethylene glycol port inventory changes in December 2025:

On December 29, 2024, the total spot inventory of ethylene glycol in major ports of East China was 659,500 tons, a decrease of 30,500 tons compared to the 690,000 tons recorded on December 1st.  Compared to the 499,000 tons recorded on October 30th, the inventory increased by 200,500 tons.

Port inventories began to accumulate in October, rising from 350,000 tons to 750,000 tons, before starting to decline in mid-December.

Analysis of the reasons behind the stabilization and rebound of ethylene glycol prices:

In mid-to-late December 2025, ethylene glycol prices stopped falling, stabilized, and began to rebound. This was primarily due to the combined effect of five factors: strengthened cost support, reduced supply, attractive valuations attracting capital and improving market sentiment. These factors, coupled with a recovery in macroeconomic sentiment and the energy and chemical sectors, drove a rebound from low price levels and subsequent range-bound trading.

1. Cost side: Supported by both crude oil and coal

International oil prices stopped falling and rebounded due to geopolitical tensions and positive US economic data, driving up the cost of ethylene glycol produced from oil and limiting the scope for further price declines.

Coal prices stabilized in late December due to strong seasonal demand and the completion of annual production targets at coal mines, strengthening cost support for ethylene glycol produced from coal.  Some loss-making plants entered maintenance or reduced production.

2. Supply side: Domestic and international production cuts + shrinking imports, leading to a reduced expectation of inventory accumulation

Low domestic profit margins were forcing production cuts/shutdowns: Since December, nearly 2-3 million tons of oil-based production capacity (such as Maoming Petrochemical and Shenghong Refining & Chemical) had been shut down or operating at reduced capacity. Domestic maintenance capacity had increased to 3.2 million tons/year (accounting for approximately 18% of total capacity), and the operating rate had fallen to the 61%-65% range.

Supply from outside mainland China was contracting: A 720,000-ton capacity plant in Taiwan, China, was scheduled to shut down starting in January, reducing monthly imports to mainland China by 40,000-50,000 tons; some plants in Saudi Arabia were undergoing maintenance or awaiting restart, and January imports may fall below 60,000 tons, marginally easing inventory pressure.

3. Demand side: The decrease in polyester operating rates was less than expected

Polyester operating rates remained at a high level of 87%-88%, maintaining stable demand for ethylene glycol; although downstream weaving activity had weakened, expectations of marginal improvements in orders and operating rates supported the continued high operating rates of polyester. This differed from previous expectations of a decline in downstream polyester production.

4. Market and Funding: Undervalued stocks provided support + sentiment recovery

After ethylene glycol prices fell to a low point (briefly dropping below 3,600 RMB/ton in mid-December), expectations of a valuation recovery emerged, attracting industrial buyers and bargain-hunting funds.

The overall risk appetite for commodities improved (such as the strengthening of the metals sector), and the general rise in chemical products boosted sentiment for ethylene glycol.

5. Inventory and Expectations: Pressure persists but is marginally easing

Inventories at major ports in East China retreated from high levels. Under the expectation of supply contraction, the rate of inventory accumulation had slowed down. The inventory accumulation pattern in January may show a slight moderation, and the downward pressure is marginally weakening.

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