On July 21st, the number of expected arrivals at ports increased, and there were expectations of accumulated inventory at the main port, leading to a weakening of the market price center. The mainstream spot price in East China closed at 9100 yuan/ton, -60 yuan/ton; South China’s spot market remains tight and the price center is strengthening, with the market closing at 8200 yuan/ton,+50 yuan/ton.
Fundamentals:
Supply: Domestic facilities, Shenghong and Hengli have implemented maintenance plans for one set of facilities, while CNOOC Shell and Gulei Petrochemical have restarted; Imported from abroad, there is a shortage of short-term arrivals, and the Strait of Hormuz has been reopened. As of July 20th, the inventory of diethylene glycol ports in East China was 3600 tons, a decrease of 700 tons from the previous statistical cycle. This week (July 21-27), Zhangjiagang’s diethylene glycol is scheduled to arrive at the port with 9600 tons. The downstream demand side has shown lukewarm performance, and combined with the recent shipment situation at the main port, there is a certain expectation of inventory accumulation at the main port in East China.
Demand: The overall load of downstream polyester and unsaturated resin is stable, and there is a significant discount from the southern region to the eastern region. The supply will be supplemented by the southern region. According to statistics, as of July 16th, the average operating rate of unsaturated resin factories in China was 34%, an increase of 2% compared to the previous period. In terms of dock shipments, from July 13th to July 19th, the total amount of shipments from the main ports in East China, Changjiang International and Fubao Warehouse, was 1684 tons, with an average daily shipment of 241 tons. On July 20th, a total of 284 tons were shipped from the two storage areas in Zhangjiagang, an increase of 92 tons compared to the previous day.
On the cost side: The market is concerned that the US Iran conflict may escalate further, supply risk concerns are increasing, and international oil prices are rising. The price of gasoline in the United States has once again surpassed the $4 mark after a month. If the Strait of Hormuz continues to be volatile, Brent crude oil prices may exceed $120 per barrel in the fourth quarter of 2026.
Market expectations: In the short term, for the supply side of diethylene glycol, domestic units Shenghong and Hengli have implemented maintenance plans, CNOOC Shell and Gulei Petrochemical have restarted, and foreign imports will arrive at the port around the weekend to alleviate short-term shortages. Attention will be paid to the impact of the re closure of the Strait of Hormuz on imported cargo in the later stage; In terms of downstream demand, the overall load of polyester and unsaturated resin is stable, and attention should be paid to the replenishment situation in the downstream. In the short term, due to the high price and low inventory of diethylene glycol in the upstream and downstream, the price is easily affected by centralized procurement of essential needs, and the price may fluctuate widely at high levels. The later supply will have a significant impact on price expectations, and the focus will be on downstream demand, near foreign goods, and sustained supply of imports from the Middle East.