SunSirs: An In-Depth Analysis of the Reasons Behind the Decline in Ethylene Glycol Prices in May 2026

Ethylene Glycol Prices Lowered in May

In May 2026, the price of ethylene glycol experienced a significant decline. According to data from SunSirs, as of May 29, the average market price for domestic oil-based ethylene glycol stood at 4,770 RMB/ton—a decrease of 7.47% compared to the average price of 5,155 RMB/ton recorded on May 1.

Regarding port-side ethylene glycol, as of the 29th, basis quotes for spot contracts (minimum 500 tons) at ports fluctuated in tandem with futures market movements. Throughout the day, basis quotes for spot contracts traded within the range of +85 to +93. By the close of trading, basis quotes for next week's contracts (prior to June 5) stood at +102 to +107, while basis quotes for contracts covering the second half of June were at +123 to +125.

Domestically, the ex-works price (full truckload basis) for coal-based polyester-grade ethylene glycol spot cargo—sold in bulk, tax-inclusive, and on a self-pickup basis—ranged from 4,030 to 4,150 RMB/ton.

On the international front, as of May 29, negotiated transaction prices for ethylene glycol shipments bound for China (CIF) hovered around 578 USD per ton, while negotiated transaction prices for shipments bound for Southeast Asia (CIF) hovered around 700 USD per ton.

Ethylene Glycol Port Inventory Changes: May 2026

As of May 28, 2026, the total spot inventory of ethylene glycol at major ports in East China stood at 646,000 tons. This represents a decrease of 126,400 tons compared to the total of 772,400 tons recorded on April 30, and a decrease of 307,000 tons compared to the total of 953,000 tons recorded on March 30.

Analysis of the Reasons Behind the Decline in Ethylene Glycol Prices in May 2026:

The sharp decline in ethylene glycol prices in May 2026 was driven primarily by a confluence of factors: the dissipation of geopolitical risk premiums, a plunge in crude oil prices, high operating rates at domestic coal-based production facilities, the seasonal lull in polyester demand, and a concentrated exodus of capital from the market. This combination created a negative feedback loop characterized by "collapsing costs, surging supply, and weak demand."

Cost Side: Easing Middle East Tensions, Sharp Drop in Crude Oil, and "Deflating the Bubble" of Geopolitical Premiums

The primary driver behind the rise in ethylene glycol prices in April was the conflict between the U.S. and Iran, coupled with disruptions to shipping through the Strait of Hormuz; this triggered a scramble for inventory accumulation in the market, thereby driving up the "geopolitical risk premium." In May, however, the situation took a turn: the U.S. and Iran resumed negotiations, expectations of a reconciliation intensified, and the outlook for the resumption of shipping through the Strait improved, leading to a rapid dissipation of the conflict-related premium. On the cost front, oil prices experienced a precipitous decline—with Brent crude falling from $115 per barrel (early May) to the $99–$105 range (mid-to-late May)—causing the production costs for oil-based ethylene glycol to collapse.

Supply Side: High Domestic Operating Rates & Revised Import Expectations—Pressure Exceeds Forecasts

In May, the overall operating rate for domestic ethylene glycol production ranged from 58% to 68%. Specifically, coal-based production stood at 68%–82% (representing a high level), while oil-based production was at 54% (reflecting scheduled maintenance, though the overall rate remained relatively robust). On the import front, maintenance at Middle Eastern facilities is expected to lead to a decline in arrivals at ports during May and June; however, short-term arrivals remain relatively abundant. Consequently, the anticipated "reduction in imports" has already been priced into the market, and no immediate supply shortage has materialized.

Demand Side: Polyester Off-Season + Weak End-Market — Negative Feedback Continues to Intensify.

In May, the average operating rate for polyester production stood at 75%–77%, representing a year-on-year decline of 3–5 percentage points, as production cuts for both filament and staple fibers became more widespread. Regarding downstream demand, textile and apparel exports remained weak, while domestic consumption was sluggish; furthermore, a depressed real estate market weighed on the building materials and home appliance sectors, thereby indirectly dampening demand for polyester. Raw material inventories at polyester plants currently stand at just 7.5 days' supply—a three-year low—indicating that manufacturers are procuring only to meet immediate operational needs and show little inclination to actively restock. This negative feedback loop continues to intensify: weak downstream demand leads to high polyester inventories; this prompts production cuts, which in turn reduce the procurement of ethylene glycol; consequently, prices fall, further discouraging any willingness to restock.

Capital and Sentiment: Strong Dollar, Bearish Outlook—Capital Exits En Masse

News of a settlement in May triggered a wave of concentrated stop-loss selling; futures contracts plummeted on heavy volume, dragging down spot prices in their wake.

June 2026 Ethylene Glycol Price Forecast:

The price trend for ethylene glycol in June is highly likely to follow a pattern of "initial weakness followed by stabilization, with narrow-range fluctuations"; significant declines or surges are unlikely, and the central price level for port spot cargoes is expected to hover around 4,400 RMB/ton.

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