SunSirs: With the Expection of Geopolitical Tensions Easing, Diethylene Glycol Prices Saw a Correction

Price trend

On March 11, the domestic diethylene glycol market saw mixed results. In the mainstream market, spot prices in East China closed at 4,350 RMB/ton, down 20 RMB/ton. In South China, concerns about geopolitical issues affecting supply led holders to remain reluctant to sell, resulting in sporadic spot price quotations and a slightly cautious market sentiment. Prices closed at 4,900 RMB/ton, up 450 RMB/ton.

Fundamental analysis:

Supply: As of March 8, the port inventory of diethylene glycol in East China was 56,000 tons, an increase of 8,000 tons compared to the previous statistical period. This week (March 10-16), 10,500 tons of diethylene glycol are expected to arrive at Zhangjiagang Port, an increase in expected arrivals. As downstream industries gradually resume work and production, port shipments may increase, and the inventory of major ports in East China will not change significantly.

Demand: Downstream demand was gradually recovering, with unsaturated resin plants continuing to restart during the week, leading to a gradual increase in demand. Statistics show that the average operating rate of domestic unsaturated resin plants this week was 35%, a 20% increase compared to the previous period. On March 10th, the total shipment volume from the two warehouses in Zhangjiagang was 1,522 tons, an increase of 138 tons compared to the previous day.

Costs: The market believed the conflict between Iran and Israel may end sooner than expected, coupled with the G7's possibility of releasing strategic reserves, leading to a decline in international oil prices. Oil prices have already experienced two significant fluctuations this week. On Monday, benchmark oil prices surged to a near four-year high; on Tuesday, US President Trump's statement that the Middle East conflict might end soon caused oil prices to plummet by 11%; Tuesday evening, a erroneous tweet from the US Energy Secretary claiming the US Navy had successfully escorted an oil tanker through the Strait of Hormuz caused oil prices to drop by as much as 20%. If G7 leaders announce substantive measures after their meeting, it could trigger a third consecutive day of significant volatility in oil prices.

Market Outlook:

With the traditional peak season approaching and downstream industries gradually restarting, demand remained strong. However, as the situation in the Middle East eased, oil prices were under pressure and falling, leading to strong resistance from downstream buyers and weak enthusiasm for actual purchases. The diethylene glycol market faces short-term pressure.

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