SunSirs: Ethylene Glycol Prices Soared 36.12% in March

Ethylene Glycol Prices Soared 36.12% in March

In March 2026, ethylene glycol prices reversed their downward trend and surged dramatically. According to data from SunSirs, as of March 20, the average domestic price for oil-based ethylene glycol stood at 5,170 RMB/ton—an increase of 36.12% compared to the average price of 3,798 RMB/ton recorded on March 1.

Regarding port-side Ethylene Glycol (EG), as of the 20th, basis quotes for spot contracts (starting from 500 tons) fluctuated in tandem with movements in the futures market. Last week, intraday basis quotes for spot contracts traded within the range of -60 to -30. By the close of trading, basis quotes stood as follows: the late-March contract (prior to March 25) was quoted at -35 to -30; the contract for the week after next (prior to April 3) was quoted at -21 to -15; the late-April contract (prior to April 25) was quoted at -90 to -85; the late-March contract (prior to March 25) was quoted at -40 to -35; and the late-April contract (prior to April 25) was quoted at -30 to +0. Currently, prices remain at elevated levels, basis spreads are exhibiting significant volatility, and trading activity remains relatively subdued.

Domestically, the ex-works price for truckload quantities of coal-based, polyester-grade Monoethylene Glycol (MEG)—offered as bulk liquid, tax-inclusive, and for self-pickup—ranged from 4,250 to 4,500 RMB/ton.

Regarding international MEG markets, as of March 19, recent shipments were being negotiated and traded at a CIF (Cost, Insurance, and Freight) price of approximately 627 USD per ton.

Changes in Ethylene Glycol Port Inventories in March 2026

As of March 19, 2026, the total spot inventory of ethylene glycol at major ports in East China stood at 933,000 tons—an increase of 6,600 tons compared to the 926,400 tons recorded on March 2.

An Analysis of the Reasons Behind the Sharp Rise in Ethylene Glycol Prices in March

In March 2026, ethylene glycol prices surged significantly, rebounding sharply from the lows recorded at the beginning of the month as the market rapidly shifted from a previously loose supply environment to a state of tight equilibrium. The primary driver behind this market rally was a contraction in import supplies triggered by geopolitical conflicts in the Middle East. This factor was compounded by concentrated spring maintenance shutdowns at domestic facilities—resulting in reduced operating loads—as well as rising costs for crude oil and naphtha, and robust demand support from downstream polyester manufacturers resuming operations. The confluence of supply-demand dynamics and rising production costs collectively propelled prices upward; in the short term, geopolitical risk premiums and the ongoing trend of inventory destocking are expected to remain the dominant forces shaping the market.

Analysis of Core Drivers

1. Geopolitical Conflicts Dominate: Supply Disruptions in the Middle East, Import Expectations Plummet

China's import dependency for ethylene glycol stands at approximately 28%. Of this volume, over 65% originates from the Middle East—with Saudi Arabia accounting for more than 55% and Iran for about 13%—and is primarily transported through the Strait of Hormuz.

Disruptions to Shipping: Shipping efficiency through the Strait has declined, insurance costs have risen, and vessel schedules have faced delays; consequently, projected arrival volumes for March and April have been significantly revised downward.

Facility Disruptions: Oil and gas infrastructure within the region has been impacted by conflict; consequently, a number of overseas facilities have reduced operating rates, shut down, or declared *force majeure*, thereby disrupting the global flow of supplies.

Structural Deficit: The supply of high-end, fiber-grade materials relies heavily on the Middle East; the resulting contraction in supply has created a rigid structural deficit, serving to support an upward shift in the central price level.

2. Supply-Side Contraction: Simultaneous Domestic and International Production Cuts Trigger Inventory Destocking Cycle

Domestic Plant Maintenance Concentrated in Spring

Coal-based MEG: March marked the onset of a concentrated maintenance period; multiple facilities underwent shutdowns or reduced operating rates, resulting in a month-on-month decline in coal-based production loads.

Oil-based MEG: Surging prices for naphtha and ethylene drove up production costs, compelling manufacturers to cut operating rates and leading to a significant loss in daily output.

The industry-wide comprehensive operating rate has dropped to approximately 66%, reflecting a continued contraction in domestic supply.

An Inventory Inflection Point Emerges

The upward trend in inventory levels at major ports in East China has been curbed. Moving forward—driven by a decline in imports and a rebound in domestic demand—the market is expected to enter a phase of accelerated inventory drawdown, thereby providing fundamental support for prices.

3. Cost-Side Support: Strengthening Oil and Gas Markets, Reshaping Processing Spreads

With Brent crude oil breaking the $100-per-barrel mark—accompanied by simultaneous surges in naphtha and ethylene prices—the production costs for oil-based ethylene glycol have risen sharply, establishing a strong cost floor.

Meanwhile, thermal coal prices have remained relatively stable; this has widened the cost advantage of coal-based ethylene glycol, facilitating a recovery in industry profitability and further lifting the market's structural bottom.

4. Demand-Side Support: Release of pent-up demand following the resumption of work; expectations for the peak season were heating up

Following the Spring Festival, downstream polyester and weaving sectors have fully resumed operations; polyester operating rates have steadily rebounded to over 85%, and genuine demand continues to materialize. March and April constitute the traditional peak season, during which a resurgence in orders converges with restocking demand, thereby alleviating supply-side pressures and establishing a solid demand foundation for upward price movements.

5. Capital and Sentiment: Expectations of a Supply Crisis Intensified, Bulls Proactively Increased Positions.

Geopolitical conflicts have triggered a trading dynamic driven by tightening supply; consequently, trading volume and open interest in the futures market have expanded in tandem. Capital inflows have accelerated upward price momentum, establishing a positive feedback loop characterized by the sequence: "Expectations – Capital – Prices."

Market Outlook and Key Focus Areas

Short Term (1–4 weeks): Key variables center on the situation in the Middle East, shipping conditions in the Straits, and operational updates at overseas facilities; a supply premium persists, and prices are expected to remain on an upward trend.

Medium Term (1–3 months): Focus remains on the intensity of domestic plant maintenance, the sustainability of polyester operating rates, and the pace of inventory drawdown at ports; the tight supply-demand balance is expected to continue.

Key Risks: Easing geopolitical tensions, imports arriving at ports exceeding expectations, downstream demand falling short of expectations, and a correction in crude oil prices.

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