Spot prices rise above 5900! How much further can the ‘near-term tight’ market for ethylene glycol go?
On October 29, the domestic ethylene glycol market experienced a sharp surge, with the basis at major ports in East China rising rapidly. The premium of near-month contracts expanded to 400-450 yuan/ton, and mainstream spot cash transactions reached 5850-5900 yuan/ton, making the strong performance in the spot market particularly eye-catching. This round of price increase is not merely driven by speculative funds, but rather by the combined effect of low inventories, high rigid polyester operating rates, and tightened circulation of supply. The market has already formed a distinct structural divergence characterized by ‘tightness in the near term and weakness in the long term.’
From the perspective of underlying demand logic, ethylene glycol is an irreplaceable raw material in polyester production, undergoing a polycondensation reaction with PTA in a fixed ratio, with no other materials able to substitute. At present, the operating rate of the domestic polyester industry remains high, at 86%-88%, with downstream factories rushing to fulfill autumn and winter fabric orders, and most units operating at full capacity. For chemical fiber companies, the cost of running out of ethylene glycol is extremely high; if raw materials become scarce and units are forced to halt production, pipeline gels can cause substantial equipment losses, which in turn compels factories to prioritize the secure supply of raw materials.
At the supply and circulation level, most large-scale fiber enterprises have already locked in the majority of incoming shipments through long-term contracts, meaning that the volume of spot goods actually entering the circulation market is inherently limited. At the same time, filament still retains a slight profit margin, so factories are strongly willing to purchase at a high basis, preferring to bear the high spot prices rather than compromise their safe raw material inventories. This further supports spot prices and amplifies the current tension in near-term supply. It is worth noting that the core tension in this round of market activity does not stem from an explosive growth in downstream demand, but rather from the rigid constraint of “high operation rates that cannot stop” combined with scarce circulating spot goods.
The most notable highlight in the current market is the typical backwardation structure of ethylene glycol, strong in the near term but weak in the distant months. Spot prices and near-month contracts are firmly supported by low inventory and the strong demand from polyester, whereas distant-month contracts have already factored in expectations of subsequent supply recovery. In the short term, with port inventories remaining low and overseas arrivals slower than expected, combined with continued high polyester operating rates, it is difficult for the tension in spot supply to ease quickly, meaning near-term prices continue to receive practical support. However, the market is not blindly optimistic about the outlook; on the long-term side, factors such as the resumption of arrivals, domestic plant production adjustments, and whether polyester operating rates can be maintained at high levels are all variables that hang over the market.
The recovery pace of actual shipments arriving at overseas ports, which determines whether port inventories can be replenished.
The production adjustment and resumption progress of domestic ethylene glycol plants, to monitor the incremental release of domestic supply.
The sustainability of downstream polyester operating rates. If autumn and winter orders decline, reductions in polyester production will weaken the strong demand support.
Overall, the short-term strength of the ethylene glycol spot market is backed by a solid fundamental basis, but the market is driven by a phase of tight balance rather than a long-term bullish trend. Amid the interplay between “tightness in the near term” and “ease in the long term,” the market is likely to continue showing structural divergence. Both traders and industry participants should avoid simply chasing highs on one side and need to continuously track the key indicators mentioned above, waiting for signals of marginal changes in the supply-demand landscape.
Post time: Nov-02-2026
