Introduction: In late September, diethylene glycol (DEG) prices fluctuated around the 7,000 yuan/ton mark. Real transaction prices moved up by approximately 400 yuan and down by 300 yuan. Amid this rapid rise-and-fall market, downstream follow-through was generally sluggish, refinery wharf shipment volumes showed no significant increase, and market participants largely operated in line with prevailing trends. The market is likely to continue oscillating in the near term, with limited influence from crude oil and broader commodity trends.
The DEG market has currently developed a pattern of intense bargaining around sensitive price levels, reflecting persistent weak expectations for DEG fundamentals. Geopolitical tensions involving the US and Iran, international crude oil prices, and broader commodity trends have failed to provide effective directional guidance for DEG. One-sided price movements have become the dominant feature of the current market. Frequent price fluctuations have also impacted downstream demand follow-through; even when prices fell below 7,000 yuan/ton, they did not significantly boost procurement intentions among downstream factories. From the perspective of major port shipments, daily average volumes remained around 200 tons throughout the month. Upstream refineries similarly faced insufficient demand, resulting in relatively high intra-plant DEG inventories. Feedback from downstream users indicates that while falling DEG prices are favorable for purchasing, earlier high prices led some companies to substitute DEG with other raw materials, complicating cost pass-through mechanisms. Consequently, pre-National Day holiday procurement was primarily driven by rigid demand.
Influenced by the international situation, imports from the Middle East were absent during the third quarter. Major ports relied on supplies from domestic sources, South Asia, and North America. Quarterly inventory levels fluctuated within a narrow range of 3,000 to 7,000 tons, representing an extremely low level. Recently, vessel cargoes from the Middle East scheduled for October arrival have begun to be reported. Combined with supplies from South Asia, North America, and domestic sources, confirmed expected arrivals for October will exceed 20,000 tons. This total volume represents a clear bearish signal relative to anticipated changes in demand. Regarding domestic supply, large integrated refining and chemical complexes are currently operating at full capacity, with leading producers running at full or over-capacity rates. There are virtually no maintenance plans for September and October. Additionally, the new unit at Sinopec-Saudi Aramco Gu Lei Petrochemical Company Limited is expected to commence production in October.
Viewing demand through the lens of supply: The three major downstream sectors—unsaturated resins, polyesters, and polyurethanes—are all facing challenges related to cost pass-through. Driven by crude oil prices, the prices of key raw materials have continued to strengthen. Previously exceptionally high prices led some unsaturated resin and polyurethane manufacturers to substitute DEG with other alcohols such as monoethylene glycol (MEG) and propylene glycol during production. Even though DEG prices are currently trending downward in a one-sided market, considering that other raw material prices remain elevated and substitution orders are still being processed, downstream demand for DEG in September is unlikely to see a significant increase. Inventory holders have limited expectations for pre-holiday stockpiling.
The broad decline triggered by expectations of increased supply has not yet concluded. Market consensus regarding a break below the 8,000 yuan/ton threshold remains relatively unified. However, few participants have discussed potential support levels for spot prices following such a breach. For now, market judgment tends toward a wait-and-see approach, observing developments before making further assessments.
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