What drives the price link between ethylene glycol and methanol?

What drives the price link between ethylene glycol and methanol?
Ethylene glycol and methanol frequently move together due to shared production routes and feedstock dynamics. In coal-to-EG processes, methanol is an upstream intermediate—coal is gasified to syngas, converted to methanol, then to ethylene glycol via oxalate ester routes. This vertical relationship means methanol price spikes can lift EG production costs. Additionally, both compete for coal and natural gas feedstocks, so energy price swings transmit across both markets. The correlation is strongest when coal-based EG capacity operates at high rates. Conversely, oil-based EG tracks naphtha and crude, creating occasional divergences. For traders, monitoring methanol inventory and coal prices in Shanxi and Inner Mongolia—key coal-chemical hubs—provides leading signals for EG supply expectations, especially when EG plants face feedstock cost squeezes or methanol-to-olefins units switch output.