Introduction: In September, major integrated refining and chemical complexes maintained generally stable and sufficient supply. Domestic output alone can meet downstream demand, and supply surpluses have emerged in some regions. Diethylene glycol (DEG) is reassessing its supply-demand structure, and at this stage demand has begun to determine market trends.
Escalating US-Iran tensions pushed international oil prices higher, and crude continued to climb. As the cost source for chemicals, higher crude prices lifted valuations across the chemical sector. DEG exhibited a one-sided price trend. Domestic supply has returned to a stable and sufficient state; South China in particular is oversupplied, with surplus volumes supplied to East China. Combined with insufficient downstream demand and relatively loose purchasing, DEG has entered a weak downward channel.
Detailed Operating Status of China's Diethylene Glycol Plants
| Region | Enterprise Name | Effective Capacity | Current Operating Rate |
|---|---|---|---|
| East China | Shanghai Petrochemical No.2 | 3.8 | 13.14% |
| Yangzi Petrochemical | 3 | 0.00% | |
| Yangzi-BASF | 3.4 | 42.41% | |
| Far East Union | 4.5 | 77.70% | |
| Fude Energy | 5 | 53.28% | |
| Sanjiang Chemical No.2 | 6 | 95.14% | |
| Zhenhai Refining & Chemical | 13 | 51.23% | |
| Zhejiang Petrochemical | 19 | 101.38% | |
| Satellite Chemical No.2 | 7.5 | 148.00% | |
| Shenghong Refining & Chemical No.2 | 7.5 | 95.33% | |
| Yantai Wanhua | 0.3 | 55.50% | |
| Yulong Petrochemical | 8 | 92.50% | |
| Fujian Refining & Petrochemical | 4 | 58.28% | |
| Sinochem Quanzhou | 5 | 66.60% | |
| Gulei Petrochemical | 6 | 99.90% | |
| North China | Sinopec SABIC Tianjin | 4.2 | 56.29% |
| Northeast China | Hengli Petrochemical | 15 | 85.10% |
| Jilin Petrochemical | 1.59 | 10.47% | |
| Beifang Chemical | 2 | 51.62% | |
| South China | Maoming Petrochemical | 1.2 | 16.10% |
| CNOOC Shell No.1 | 3.5 | 47.57% | |
| Zhongke Refining & Chemical | 4 | 108.23% | |
| Hainan Refining & Chemical | 6.5 | 0.00% | |
| BASF Zhanjiang | 6.4 | 70.76% | |
| Central China | Wuhan Petrochemical | 2.8 | 17.84% |
| Southwest China | Sichuan Petrochemical | 3.6 | 55.50% |
Data source: Chempricehub.
From domestic plant operating data, China's overall DEG operating rate currently stands at around 63%, a clear rebound from the previous low. East China: Zhejiang Petrochemical, Satellite Chemical No.2, Shenghong Refining & Chemical No.2, Yulong Petrochemical, Sanjiang Chemical No.2, and Zhenhai Refining & Chemical are all supplying the market in full and operating steadily. South China: Hainan Refining & Chemical remains shut down; Zhongke Refining & Chemical and Gulei Petrochemical are basically operating at full capacity; Fujian Refining & Petrochemical, Sinochem Quanzhou, and BASF Zhanjiang are operating at 60–70%. Constrained by the single downstream profile in South China, local plants can still meet downstream demand and have surplus capacity even without running at full rates.
Currently, DEG has entered a phase in which demand determines market trends. The earlier price surge led the two major downstream sectors, unsaturated polyester resins and polyurethanes, to substitute other alcohols in production. They remain in a phase of reduced procurement and are unlikely to recover in the short term. Although imports were lacking during the month, domestic supply was relatively stable, and domestic output can cover current demand. The market is showing a new round of supply-demand reassessment.
Structurally, imports continued to be absent during the month, but domestic production is sufficient to cover essential demand, and the supply-demand balance has entered a recalibration phase. Downstream margin-protection measures taken earlier in response to high DEG prices will continue in the short to medium term, and spot trading volumes are restraining market trends. Externally, the effective impact of sharply higher international oil prices on bulk commodities is difficult to transmit to DEG at this stage, when supply and demand are the main considerations. A situation of continuous mild declines took shape during the month.
Comments
0