SunSirs: With an Increase in Expected Arrivals, the Price Center of Diethylene Glycol Shifted Downward

Price trends

On July 21, anticipated port arrivals increased, leading to expectations of inventory accumulation at major ports and a downward shift in market prices. Mainstream spot prices in East China closed at 9,100 RMB/ton (down 60 RMB/ton), while spot supplies in South China remained tight, driving prices upward to close at 8,200 RMB/ton (up 50 RMB/ton).

Fundamentals:

Regarding supply: Domestically, maintenance plans are being implemented for units at Shenghong and Hengli, while CNOOC-Shell and Gulei Petrochemical have restarted operations. On the import front, near-term arrivals are limited, and the Strait of Hormuz has closed again. As of July 20, port inventories of diethylene glycol (DEG) in East China stood at 3,600 tonnes, a decrease of 700 tonnes from the previous reporting period. Scheduled arrivals at Zhangjiagang port for the current week (July 21–27) total 9,600 tonnes. Downstream demand remains lackluster; given recent shipment volumes from major ports, an accumulation of inventory is anticipated at these key East China ports.

Demand: Operating rates for downstream polyester and unsaturated resin remained generally stable overall; regionally, prices in the South traded at a significant discount to East China, with some South China supply supplemented by deliveries from other areas. Statistics show that as of July 16, the average operating rate of domestic unsaturated resin plants stood at 34%, up 2% from the previous period. Regarding terminal shipments, the total volume dispatched from the Yangtze International and Vopak storage areas at major East China ports was 1,684 tonnes between July 13 and July 19, averaging 241 tonnes per day. On July 20, total shipments from the two storage areas in Zhangjiagang amounted to 284 tonnes, an increase of 92 tonnes compared to the previous day.

Cost side: International oil prices have risen due to market concerns over a potential escalation of the US-Iran conflict and heightened fears regarding supply risks. US gasoline prices have once again breached the $4-per-gallon mark after a one-month hiatus. Should instability in the Strait of Hormuz persist, the price of Brent crude could surpass $120 per barrel in the fourth quarter of 2026.

Market outlook

Regarding short-term supply, maintenance plans are being implemented for specific units at Shenghong and Hengli, while CNOOC-Shell and Gulei Petrochemical have restarted operations; a concentration of imports arriving around this weekend is expected to alleviate the immediate shortage, though the potential impact of a renewed closure of the Strait of Hormuz on future shipments warrants attention. On the demand side, operating rates for polyester and unsaturated resins remain generally stable; market participants are monitoring downstream restocking activity. In the near term, with prices at high levels and inventories low across the supply chain, prices are susceptible to volatility driven by concentrated purchasing to meet essential needs—potentially resulting in wide fluctuations at the high end of the range. Future price trends will be heavily influenced by supply dynamics, making it crucial to track downstream demand alongside the continuous inflow of cargoes from nearby regions and the Middle East.

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