In May, the price of ethylene glycol stopped falling and rebounded
The price of ethylene glycol will stop falling and rebound in May 2025. According to data from Shengyi Society, as of May 14th, the average price of domestic oil to ethylene glycol was 4536.67 yuan/ton, an increase of 4.73% compared to the average price of 4331.67 yuan/ton on May 1st.
On May 14, 2025, the trading of spot contracts for ethylene glycol at the port rebounded, with obvious follow-up buying, and a transaction range of 4580-4620 yuan/ton. In terms of basis, the intraday trading was initially strong and then weak. Yesterday night, due to the impact of device news, the pre market basis quotation for spot contracts this week was 170-200, but in night trading it fell back to 145-150. Today, the daily operating range for spot contracts this week is+115 to+150; After the close of trading, the contract basis price for this week ranges from+115 to+120. The contract basis price for May ranges from+115 to+120, the contract basis price for June ranges from+95 to+100, and the contract basis price for July ranges from+75 to+85.
The spot price of domestic coal to polyester grade ethylene glycol (loose water, tax included, self pickup) per unit is 4050-4150 yuan/ton.
In terms of external ethylene glycol, as of May 12th, the landed price of ethylene glycol in China is 508 US dollars/ton, and the landed price of ethylene glycol in Southeast Asia is 503 US dollars/ton.
Port inventory slightly decreased in May
From January to mid February, there was a significant accumulation of ethylene glycol inventory in the port, and from March to May, the port inventory fluctuated horizontally. On May 12, 2025, the total inventory of ethylene glycol in the main port of East China was 656100 tons, a decrease of 44800 tons from the total inventory of 700900 tons on April 28; The total inventory as of December 30, 2024 was 397300 tons, an increase of 258800 tons.
The recent upward trend is driven by:
1. Macro sentiment is positive, and cost support is strengthened
The phase of China US tariff negotiations is favorable, and market sentiment is high.
On May 12th, China and the United States issued a joint statement on the China US Geneva Economic and Trade Talks, which includes the following key points: 1) The United States will reduce the 125% “equivalent tariff” imposed on China in this round to 34% when it was initially announced on April 2nd, with 24% of tariffs suspended for 90 days and the remaining 10% tariffs retained. Within 90 days of the implementation of the “equivalent tariffs”, the United States has reduced its tariffs on China by 115%. The current average tariff rate is: the weighted average tariff rate before Trump took office is about 10%+the “analgesic tariff” of 20%+the “equivalent tariff” of 10%=about 40%. The tariff rate after 90 days of the “equivalent tariff” taking effect, that is, after July 9th, depends on the negotiation process in the future.
China’s reciprocal operation will reduce the 125% tariff on US countermeasures to 34%, suspend 24% of the tariff for 90 days, and retain the remaining 10% tariff. In addition, China has suspended or cancelled non-tariff countermeasures against the United States since April 2nd. Within 90 days of the effective implementation of the countermeasures, China’s tariffs on the United States have decreased by 115%. The current average tariff rate is: the weighted average tariff rate before Trump took office is about 15%+the overall weighted analgesic countermeasures tariff is about 5%+the equivalent countermeasures tariff is 10%=about 30%.
The Ministry of Finance has announced that starting from 12:01 pm on May 14, 2025, tariffs on imported goods originating in the United States will be adjusted. The relevant matters are as follows: Adjust the additional tariff rate stipulated in the “Announcement of the State Council Tariff Commission on Imposing Additional Tariffs on Imported Goods Originating in the United States” (Tariff Commission Announcement No. 4 of 2025) from 34% to 10%, and suspend the implementation of the 24% additional tariff rate on the United States for 90 days.
Benefiting from the positive news of tariffs between China and the United States, market sentiment is high, and crude oil prices have rebounded and risen, strengthening cost support.
2. Supply side news disrupts funds, pushing up the valuation of ethylene glycol
During dinner time yesterday, there were rumors in the market that Hengli Petrochemical’s ethylene unit had unexpectedly shut down for maintenance, and the supporting ethylene glycol 1.8 million ton unit had been repaired one month in advance, resulting in a reduction of 150000 tons in monthly supply. Coupled with the follow-up maintenance plans of companies such as Satellite Petrochemical, CNOOC Shell, and Shaanxi Yulin Chemical, the supply contraction in May and June has significantly increased, and the supply-demand gap has widened. Market sentiment is high, and price influencing factors are shifting and amplifying towards the supply and demand side.
Downstream feedback
Due to the recent rapid rise in raw material prices, the three major polyester filament manufacturers have unanimously decided to immediately implement a reduction in production for loss making varieties and have begun planning the next step of production reduction plans, which will be implemented in the short term.
Future forecast
In the short term, market sentiment is still high and there is a high probability of sideways fluctuations. Focus on the support of crude oil cost and changes in downstream operating rates.