A review of ethylene glycol price trends in 2025

Ethylene glycol prices in 2025 was strong initially and then weakened

The ethylene glycol market in 2025 followed a pattern of "initial strength followed by weakness, with a rebound from a low point at the end of the year." The ethylene glycol market in 2025 can be broadly divided into three stages: "high-level fluctuations at the beginning of the year, a unilateral decline starting at the end of August, and a rebound in December after hitting a new low."

At the end of 2025, port prices for ethylene glycol stopped falling and rebounded from their low point.

The core logic behind the price trend of ethylene glycol in 2025 is "oversupply as the dominant factor, with cost and demand as auxiliary drivers." Before the end of August, supply and demand were relatively balanced, resulting in price fluctuations; after the end of August, increased supply coupled with weak demand led to a continuous price decline; in December, due to plant maintenance, rising costs, and restocking demand, prices rebounded from a low point, but the long-term oversupply situation remained unchanged, and the sustainability of the rebound remained uncertain. The reasons for the price trends in each stage of the ethylene glycol market throughout the year are as follows:

Phase 1: The core logic of the ethylene glycol market from January to August was "cyclical balance of supply and demand + cost-driven fluctuations." In January-February, prices fluctuated upwards due to cost support and inventory replenishment; in March-April, prices declined due to weak demand and increased supply; in July-August, policy sentiment and plant maintenance drove a price rebound, but oversupply and weak demand limited the gains, resulting in range-bound fluctuations.

Phase 2: From the end of August to November, the core logic of the ethylene glycol market was "oversupply dominance + cost collapse coupled with weak demand." From the end of August to mid-September, due to the concentrated release of new production capacity and a surge in imports, coupled with weaker-than-expected demand during the peak season, prices fell rapidly; from late September to October, driven by a significant drop in crude oil prices leading to a cost collapse, coupled with a surge in port inventories, prices continued to decline; in November, due to the continued oversupply situation and panic selling by investors, prices approached their lowest levels.

Phase 3: The core logic of the ethylene glycol market in December was driven by a combination of factors: "the exhaustion of negative factors + supply contraction, cost rebound, and demand replenishment." From December 1st to 22nd, prices hit a new low since 2021 due to selling pressure from companies seeking to recoup funds at the end of the year, coupled with delays in plant maintenance and weak demand. From December 23rd to 31st, prices rebounded from their lows due to widespread plant maintenance leading to supply contraction, coupled with a rebound in crude oil prices driving up costs, the start of polyester inventory replenishment before the Spring Festival, and improved market sentiment.

Ethylene glycol price forecast for 2026

The core logic of the 2026 ethylene glycol market forecast is: "Continued ample supply + moderate demand growth + cost fluctuations, resulting in a pattern of initial weakness followed by stability and range-bound fluctuations." From a data perspective, domestic ethylene glycol capacity reached 28.225 million tons by the end of 2024, and the surplus rate is expected to remain around 35% in 2026, maintaining an ample supply situation. In the first quarter, affected by the Spring Festival holiday, downstream polyester operating rates are expected to decline to a low of 70%-75% for the year. Meanwhile, BASF's new 800,000-ton plant is planned to start production at the beginning of the year. The supply-demand imbalance will increase inventory pressure, and prices may remain in the low range of 3,600-4,000 RMB/ton. In the second quarter, with the resumption of work and production downstream, polyester demand will improve marginally. This, coupled with the gradual release of 5.55 million tons of planned new polyester filament capacity in 2026 (expected to drive ethylene glycol demand by 1.8593 million tons/year), and the fact that PTA is in a production vacuum period with concentrated maintenance in the second quarter, will lead to a tightening of supply and a recovery in market sentiment. Inventory pressure will ease, and prices are expected to bottom out and rebound to 4,000-4,300 RMB/ton. In the second half of the year, the pace of new capacity additions will slow down, coal prices are expected to show a low-to-high trend, and several institutions predict that the average price of Brent crude oil in 2026 will fluctuate in the range of 56-65 US dollars/barrel, providing phased support to costs. Moderate growth in domestic and international demand for textiles will drive a steady increase in ethylene glycol demand, and the supply-demand balance will tend towards equilibrium. Prices are likely to remain in the 4,000-4,400 RMB/ton range, with no significant upward trend expected. Key variables to watch include the pace of new capacity commissioning, fluctuations in crude oil and coal prices, changes in polyester operating rates, and the effectiveness of industry "anti-overcapacity" policies.

Predicted key driving factors for each quarter of 2026:

First Quarter (January-March) Key Driving Factors: 1. Supply Side: New capacity came online in a concentrated manner (such as BASF's 800,000-ton plant), coupled with the average operating rates of coal-based and oil-based ethylene glycol plants already reaching medium-to-high levels of 61.95% and 64.25% respectively in 2025. Operating rates in the first quarter of 2026 are expected to remain at 60%-65%, with limited supply reduction, thus continuing the loose supply situation. 2. Demand Side: The Spring Festival holiday led to a decline in downstream polyester operating rates to a low of 70%-75% for the year, and weaving operating rates in the Jiangsu and Zhejiang regions are expected to fall to 55%-60%, resulting in weak demand for ethylene glycol; historical data shows that the post-holiday resumption of work typically lasts 3-4 weeks, and although there was a gradual resumption of work in March, the monthly inventory reduction is expected to be less than 50,000 tons, resulting in limited inventory reduction. 3. Inventory and Sentiment: By the end of 2025, inventory at East China ports had reached 680,000 tons. Due to the supply-demand imbalance, an additional 150,000-200,000 tons of inventory are expected to accumulate in the first quarter, and the market continues the pessimistic sentiment from the end of 2025, further suppressing prices. 4. Cost Side: Coal prices are weak due to the seasonal decline in demand after the end of winter heating.  Regarding crude oil, institutions predict that the first quarter will be the period of loosest supply and demand in the oil market, with Brent crude oil likely trading in the range of $55-60 per barrel, resulting in weak cost support.

Key driving factors for the second quarter (April-June): 1. Demand side: Downstream polyester production has fully resumed, with operating rates recovering to a high level of 85%-90%; terminal textile demand, both domestic and international, is gradually recovering, and weaving operating rates have increased to 70%-75%, leading to a marginal improvement in ethylene glycol demand; simultaneously, approximately 30% of the planned 5.55 million tons of new polyester filament capacity in 2026 is scheduled to come online in the second quarter, which is expected to drive an increase in ethylene glycol demand of 550,000-600,000 tons/year, further boosting demand. 2. Supply side: The pace of new capacity commissioning has slowed down, and the BASF plant commissioned in the first quarter is gradually entering a stable operating period, with no other large-scale new capacity planned; at the same time, oil-based ethylene glycol was in a loss-making state for most of 2025, and some high-cost plants may enter a maintenance cycle due to previous losses. It is estimated that the industry's maintenance capacity in the second quarter will be approximately 2-2.5 million tons/year, marginally alleviating supply pressure. 3. Industrial chain linkage: PTA is in a period of production vacuum, with 7.2 million tons of PX capacity planned for maintenance in mainland China in the second quarter, and PTA plants in East China, South China, and other regions undergoing simultaneous maintenance. It is expected that the PTA industry operating rate will drop to 70%-75%, and the tight PTA supply will boost sentiment in the polyester industry chain, indirectly stimulating ethylene glycol demand. 4. Inventory: Improved demand coupled with supply contraction will alleviate inventory pressure. It is expected that inventory will decrease by 100,000-150,000 tons in the second quarter, gradually shifting towards destocking, providing support for prices.

Key driving factors for the third quarter (July-September): 1. Cost side: Coal prices are entering an upward phase with a "low in the beginning, high at the end" trend. The peak summer electricity demand and autumn heating preparation needs are driving coal prices up, providing cost support for coal-based ethylene glycol; crude oil prices may fluctuate due to geopolitical factors and the pace of global economic recovery. Institutions such as Citi predict that Brent crude oil will operate in the $60-65/barrel range in the third quarter, dominating the cost trend of oil-based ethylene glycol. 2. Demand side: The downstream textile industry is entering its seasonal peak season, with moderate growth in both domestic and international demand. Weaving operating rates are maintained at 75%-80%, leading to a steady increase in ethylene glycol demand; new downstream polyester capacity continues to be released, with an estimated 40% of new polyester filament capacity coming online in the third quarter, driving an increase in ethylene glycol demand of 750,000-800,000 tons/year, representing significant demand growth. 3. Supply side: Under high costs, some inefficient coal-based facilities (capacity with costs above 4,000 RMB/ton accounts for approximately 15% of total capacity) may reduce production or undergo maintenance. Estimated maintenance capacity is approximately 1.8-2.2 million tons/year, indicating an expected contraction in supply; import volumes are affected by domestic and international price differences. If domestic prices rise above 4,200 RMB/ton, import profits will narrow, and import volumes may show a temporary decrease of 5%-8%. 4. Policy side: The effects of the industry's "anti-overcapacity" policies may gradually become apparent. If capacity control measures are implemented, it is expected to affect 5%-10% of total capacity, causing some disruption to market sentiment and supply.

Fourth Quarter (October-December) Key Driving Factors: 1. Demand Side: The peak season for the textile industry ends, and demand enters a seasonal decline phase, with weaving operating rates falling to 65%-70%; to cope with year-end cash flow pressures, polyester enterprises may reduce operating rates to 80%-85%, reducing raw material stockpiling, leading to weaker demand for ethylene glycol, with an estimated monthly demand reduction of 80,000-120,000 tons. 2. Supply Side:  Annual capacity expansion is largely complete, with approximately 2.8 million tons of new capacity planned for 2026, expected to be fully operational by the end of the fourth quarter, leading to a more stable supply landscape; to meet annual production targets, enterprises may maintain high operating rates of 65%-70%, resulting in a slight increase in supply pressure. 3. Cost Side: Coal prices may decline after high-level fluctuations, as demand weakens after the end of autumn heating season stockpiling; coal prices are expected to fall by 5%-10%; crude oil prices are subject to uncertainty due to global economic expectations at the end of the year, with institutions such as Goldman Sachs predicting that Brent crude oil may fall to the $55-60/barrel range in the fourth quarter, weakening cost support. 4. Inventory and Funding: Under year-end cash flow pressures, traders may lower prices to sell off inventory, coupled with weak demand, leading to an estimated inventory accumulation of 120,000-180,000 tons in the fourth quarter, potentially triggering a temporary inventory build-up and suppressing prices.

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