Triethylene glycol

Recent Market Intelligence Report on Triethylene Glycol (TEG)

I. Price Trends
1. Domestic Market: Recent TEG prices in the domestic market have shown a slight upward trend with minor fluctuations. The mainstream transaction price in the East China region is in the range of 8,500–8,800 CNY/ton. Prices in the South China region are slightly higher, at approximately 8,700–9,000 CNY/ton, while prices in the North China region remain relatively stable at 8,400–8,700 CNY/ton.
2. International Market: TEG prices in the Asian region are being pushed up by raw material costs, with CFR China main port prices at USD 1,100–1,150/ton, an increase of approximately 3% compared to the previous month. Prices in the European and American markets are supported by demand, with FOB US Gulf prices at USD 1,300–1,350/ton, and Rotterdam, Europe prices at EUR 1,250–1,300/ton.

II. Supply and Demand
1. Supply Side:
- Domestic capacity utilization is approximately 75%. Some units are operating at reduced rates due to maintenance or raw material supply issues, resulting in an overall supply decrease of about 5% compared to the previous month.
- Import volumes have increased by 8% month-on-month, primarily from Saudi Arabia and Singapore. However, the staggered arrival times limit the immediate supplementary effect on the market.
2. Demand Side:
- Operating rates in the downstream polyester industry remain at high levels (approximately 90%), providing stable demand for TEG.
- Demand in sectors such as solvents and antifreeze is recovering seasonally, but the growth rate is moderate.
- Export orders have increased slightly, mainly flowing to Southeast Asian markets.

III. Costs and Profits
1. Raw Material Costs: Ethylene oxide prices have risen by approximately 5% month-on-month, driven by higher ethylene prices, directly increasing the production costs of TEG.
2. Production Profits: The industry's average gross margin has been compressed to 200–300 CNY/ton. Some enterprises are approaching the break-even point, strengthening their willingness to maintain prices.

IV. Inventory Dynamics
1. Domestic port inventories are approximately 28,000 tons, a 12% decrease from the previous month, remaining at a historically mid-to-low level.
2. Manufacturer inventories are generally low, with some companies having pre-sale orders scheduled through mid-next month.

V. Related Policies and Industry Trends
1. Domestic environmental policies are becoming stricter, placing rectification pressure on some small and medium-sized production capacities, which may lead to further supply contraction in the long term.
2. Maintenance plans for overseas units are increasing (e.g., in Saudi Arabia and the US), with import volumes expected to decrease in Q4.

Analysis and Forecast

I. Short-Term (1–2 Weeks)
1. Price Trend: Supported by raw material costs and low inventory levels, TEG prices may continue to rise slightly. The target price in the East China region may exceed 8,900 CNY/ton.
2. Market Sentiment: Downstream procurement is primarily driven by rigid demand. Traders are increasingly reluctant to sell, causing the center of gravity for market transactions to shift upward.

II. Medium-Term (1–3 Months)
1. Supply-Demand Balance: As domestic unit maintenance concludes and import arrivals increase, the tight supply situation may ease. However, with support from the peak demand season, the room for price correction is limited.
2. Price Range: Domestic mainstream prices are expected to remain in the range of 8,600–9,000 CNY/ton, while international CFR China prices are projected to be between USD 1,100–1,200/ton.

III. Long-Term (3–6 Months)
1. Capacity Changes: If environmental policies continue to tighten, the exit of outdated domestic capacity may accelerate, leading to increased industry concentration and a higher price center.
2. Demand Outlook: New capacity in the polyester industry will drive demand growth. However, demand growth in sectors such as solvents may slow down due to substitution by new energy technologies.
3. Price Forecast: Long-term prices are expected to show a \"fluctuating upward\" trend, with a target price range of 9,000–9,500 CNY/ton. Attention should be paid to fluctuations in raw material ethylene prices and the recovery of overseas supply.

IV. Risk Warnings
1. A significant drop in raw material ethylene oxide prices could weaken the cost support for TEG.
2. Early resumption of overseas units could lead to an unexpected increase in import volumes.
3. An unexpected decline in operating rates in the downstream polyester industry could weaken demand.