Ethylene glycol

Recent Market Dynamics of Ethylene Glycol (EG) Commodities

I. Price Trends
1. Domestic Market: Recently, the spot price of ethylene glycol in China has shown a narrow-range fluctuation. The mainstream market price in the East China region fluctuated within the range of 4,500-4,700 RMB/ton, with a week-on-week volatility of no more than 2%.
2. International Market: The CFR China Main Port price remained at 550-570 USD/ton. The price differential with the domestic market was stable, providing strong cost support for imported supplies.

II. Supply-Side Dynamics
1. Domestic Capacity: The operating rate of domestic ethylene glycol plants was approximately 65%, remaining flat week-on-week. Some coal-based plants reduced production due to losses, while oil-based plants maintained stable operations.
2. Import Situation: Imports in August are expected to be around 600,000 tons, a 5% decrease week-on-week, mainly due to supply contraction caused by equipment maintenance in the Middle East.
3. Inventory Changes: Port inventory decreased slightly to 550,000 tons, a 3% week-on-week decline, but remains at a historically high level for this period.

III. Demand-Side Dynamics
1. Polyester Industry: The polyester operating rate remained at a high level of 88%, providing strong rigid demand support for ethylene glycol. However, the growth rate of orders in the downstream textile industry slowed down, indicating a marginal weakening of demand expectations.
2. Other Sectors: Non-polyester demands such as antifreeze and unsaturated resins performed steadily, with no significant increase.

IV. Cost-Side Dynamics
1. Crude Oil Prices: International crude oil prices rose with fluctuations, with Brent crude breaking through 85 USD/barrel, strengthening the cost support for oil-based ethylene glycol.
2. Coal Prices: The price of thermal coal operated weakly, alleviating the cost pressure on coal-based ethylene glycol, although profits remain in a loss-making state.

V. Impact of Related Products
1. PTA: PTA prices rose driven by PX costs, widening the price differential with ethylene glycol, which may affect the raw material procurement preferences of polyester plants.
2. Methanol: Methanol prices operated weakly, having limited impact on the cost of coal-based ethylene glycol.

Analysis and Judgment
1. Supply Side: The operating rate of domestic plants is stable, and imports are decreasing, but port inventory remains high. Overall supply pressure is controllable.
2. Demand Side: High polyester operating rates support demand, but the slowing growth rate of downstream orders indicates a marginal weakening of demand expectations.
3. Cost Side: Rising crude oil prices support oil-based costs, while weak coal prices alleviate coal-based pressure. The overall cost side is relatively strong.
4. Market Sentiment: With mixed bullish and bearish factors, market sentiment is cautious, and prices lack a clear directional guide.

Forecast
1. Short-term (1-2 weeks): EG prices are expected to maintain narrow-range fluctuations within the range of 4,500-4,750 RMB/ton. Attention should be paid to fluctuations in crude oil prices and changes in port inventory.
2. Medium-term (1 month): If polyester demand remains high and imports decrease further, prices may rise slightly to around 4,800 RMB/ton. Conversely, if downstream demand weakens or inventory accumulates, prices may fall back to 4,400 RMB/ton.
3. Long-term (3 months): In the fourth quarter, attention should be paid to the progress of new plant commissioning and seasonal changes in demand. The price center may shift upward to the range of 4,600-5,000 RMB/ton.