5,055 yuan per ton—that's the domestic ethylene glycol spot benchmark price as of May 13, up more than 200 yuan from the low point earlier this month. In the upstream of the chemical fiber industry chain, ethylene glycol is experiencing a strong rally driven by supply-side factors, with a sharp drop in imports and rapid inventory depletion at ports creating a powerful resonance that has pushed prices into a high range not seen in recent years.
The Import Cliff: Geopolitical Conflict Reshapes Supply Landscape
The core engine of this ethylene glycol rally is not domestic but lies in the Strait of Hormuz. The Middle East accounts for over 65% of China's ethylene glycol imports, with Saudi Arabia alone contributing more than 55%. Recent shipping disruptions in the strait, combined with the continued shutdown of seven ethylene glycol plants in Saudi Arabia due to earlier attacks—totaling 4.17 million tons per year of capacity—have directly driven April imports below 300,000 tons, a record low in recent years. May arrivals are estimated at a mere 54,600 tons, meaning import replenishment will remain absent throughout the entire second quarter.
For polyester plants that rely on imports, this means procurement strategies must be recalibrated. The procurement rhythm of "buy as needed, ample port supplies" that has been in place for the past few years is no longer viable against the backdrop of a cliff-like decline in import arrivals.
Inventory Depletion: What 738,000 Tons Means
The direct impact of the import disruption is visible in port inventories. As of May 8, ethylene glycol inventory at East China's main ports fell to 738,000 tons, a sharp drop of 110,000 tons week-over-week, reaching a low level in recent years. More noteworthy is the speed of depletion—during the May Day holiday, average daily shipments from East China ports increased by 30% to 47.54% compared to the previous period, indicating that downstream pickup enthusiasm did not wane during the holiday.
Low inventories combined with sluggish arrivals have kept spot circulation tight, directly pushing spot basis stronger. Current spot quotes for polyester-grade ethylene glycol in East China range from 4,918 to 4,920 yuan per ton, significantly higher than the futures main contract's position above 4,800 yuan per ton. This spot premium structure reflects the market's tight supply expectations in the short term. For traders, a stronger basis means higher value in holding spot goods, but it also increases the risk of speculative hoarding.
Cost and Demand: A Two-Legged Support Base
Beyond supply tightening, both the cost side and the demand side provide solid support for prices. International crude oil hovering around $110 per barrel has significantly raised the production cost center for oil-based ethylene glycol. On the coal-based side, coal prices remain stable, and plant margins are in a reasonable range, meaning that even if oil prices pull back, the cost support from the coal route can provide a floor for prices.
On the demand side, downstream polyester industry operating rates remain around 80%, providing stable rigid demand support for ethylene glycol. Although end-use textile demand has seen minor fluctuations, overall resilience remains strong, with no large-scale production cuts observed. This pattern of "stable rigid demand, tight supply" is the core logic underpinning the continued price uptrend.
The Game Ahead: Three Variables to Watch
In the short term, ethylene glycol futures and spot prices still have room to rise, but the market's focus is shifting from "will it rise" to "how much and for how long." Three variables need close tracking: first, the restart progress of Saudi plants—the seven shutdown units totaling 4.17 million tons per year of capacity have no clear restart timeline; second, the recovery of shipping through the Strait of Hormuz, which will directly determine the pace of import arrival recovery; third, crude oil price fluctuations—if Brent crude falls from the $110 level, cost support will weaken.
For all players in the chain, the current strong ethylene glycol market presents both opportunities and risks. Polyester plants need to reassess their raw material inventory strategies, while traders should be wary of the risk of a sharp pullback from high levels.