International oil prices rebound, rising by more than 1%! Can ethylene glycol continue to advance on this momentum?
Recently, the international crude oil market has experienced an upward trend, with both major crude oil futures rising by more than 1%. Brent crude futures reached $101.25 per barrel, while New York crude futures were quoted at $89.16 per barrel. The strengthening oil prices have boosted sentiment in the chemical sector. As an important product in the petrochemical industry, ethylene glycol has also attracted significant market attention. With multiple favorable factors such as rising costs, geopolitical disturbances, and low inventories, whether ethylene glycol can leverage this momentum to sustain a continuous upward trend still requires a comprehensive examination of both supply and demand perspectives.
Supply Side Dynamics
From the supply side, there are currently both supportive factors for ethylene glycol prices and potential risks of increased supply. The Middle East is a core global production area for ethylene glycol, and the Strait of Hormuz handles a large volume of outbound petrochemical products. Currently, regional geopolitical tensions remain high, and the market is generally concerned about potential disruptions to shipping routes, with increasing risks of delays in Middle Eastern shipments. As a result, domestic ethylene glycol port inventories have significantly declined from the high of 975,000 tons in the first half of the year to 86,000 tons, remaining at historically low levels. The market expects that China’s ethylene glycol imports will stay at low levels in the fourth quarter, and port inventories may continue to remain weak, providing strong support for domestic spot prices.
The release of domestically produced incremental supply will, to some extent, offset the gap caused by the contraction of imports. Currently, the overall operating rate of domestic ethylene glycol plants remains at a relatively high level of 65.92%, with coal-based and oil-based units running steadily overall; among them, coal-based units, driven by improved production profits, have seen their operating rate reach approximately 71%. Meanwhile, two large-scale units, Zhongsha Guray and Huajin Aramco, are scheduled to go into production in the fourth quarter. Domestic ethylene glycol production has considerable incremental flexibility, and the subsequent release of domestic supply will put downward pressure on prices.
Demand Side Constraints
The performance on the demand side will be the key factor determining the sustainability of ethylene glycol price increases. The downstream polyester industry is the core constraint preventing a continued sharp rise in ethylene glycol. The fourth quarter marks the transition period between off-peak and peak seasons for the polyester industry. The traditional peak season of “Golden September and Silver October” is gradually coming to an end, and follow-up terminal textile orders lack momentum. Faced with ethylene glycol raw materials at relatively high levels, polyester factories are under increasing cost pressure. Downstream buyers show strong resistance to high-priced raw materials, mostly maintaining a purchase pattern of just-in-need procurement, with limited willingness to stock up on a large scale.
Orders in the downstream weaving segment are relatively weak, and there is significant pressure to reduce finished goods inventory, creating substantial resistance to the upward transmission of raw material price increases along the industry chain. In addition, in the fourth quarter, the domestic PX supply is tight, forcing many polyester companies to passively reduce production loads. Once polyester operating rates decline, it will directly reduce the consumption of ethylene glycol as a raw material. Even if ethylene glycol supply experiences a temporary contraction, if end-use textile consumption does not show substantial recovery, polyester companies will find it difficult to sustain high raw material costs for a long period, making further production cuts for maintenance possible, which in turn will weigh on ethylene glycol demand.
Market Outlook & Summary
Overall, rising oil prices, geopolitical disruptions, and low port inventories provide short-term support for ethylene glycol, establishing a foundation for slightly strong price fluctuations. However, relying solely on supply-side benefits is unlikely to drive a sustained one-sided price increase. The future market depends heavily on two key variables: first, supply changes brought by shifts in Middle East shipping and the commissioning progress of new domestic facilities; and second, whether textile end-user orders can improve and whether the polyester industry can maintain stable operating rates. If downstream demand continues to fail to materialize, negative feedback pressures within the industry chain will become apparent, significantly constraining the potential for ethylene glycol price increases.
Post time: Oct-08-2026
