China EG Market Strengthens on Tight Supply, Cost Support | April 2026 Analysis

In early April, China’s Ethylene Glycol (EG) market trended upward amid supply constraints and strong cost support, even as downstream polyester demand remained weak. Low operating rates, plant maintenance, and tight spot availability have become the main drivers lifting prices, while port destocking and lower imports are expected to keep supply tight through April.

Market Overview

At the start of April, China’s EG market continued its volatile uptrend. Despite sluggish polyester demand, supply-side tightness and cost support have become the core forces keeping prices strong, making the short-term trend more likely to rise than fall.

1. Low Operating Rates Extend Supply Tightness

Domestic EG capacity utilization has stayed at a low level since April began. Previously reduced capacities have not recovered, and more plants entered maintenance this week, pushing the overall operating rate down to 62.37% — a drop of 3.63 percentage points week-on-week.

This low utilization rate, the lowest since the start of the year, has further reduced market supply and tightened spot resources.

Key maintenance updates:

• Hainan Shell’s large-scale integrated unit is under maintenance

• Zhenhai Refining & Chemical Line 1 reduced load; Line 2 shut down

• Xinjiang Tianye No.3 unit began maintenance in early April

• Xinjiang Guangui unit expected to remain shut until July

• Shaanxi Coal Group started maintenance on one line April 8

• Qianxi Coal Chemical plans maintenance in April

No major plants restarted this week, deepening production contraction. April output is expected to fall further, supporting tight supply.

2. Price Increases Transmit Downstream (with Limits)

Driven by tight spot supply and cost support, domestic EG prices continued climbing. By Thursday, spot prices in East China rose sharply, narrowing the gap between futures and spot.

Although polyester plants maintained low production and sales, rigid on‑demand buying supported high‑price transactions.

Downstream impact:

• Polyester prices (POY, staple fiber) moved higher in line with EG

• Cost transmission is limited by weak end‑use demand

• Integrated EG plants remain in loss; only ethane‑based EG is profitable

• PTA prices trended upward, indirectly supporting EG demand

3. EG Market Outlook for April and Q2

Supply Side

• Restarts of idle units may begin mid‑April, but no quick ramp‑up planned

• April imports expected to drop significantly

• Southeast Asian supply shortages boost China’s re‑exports

• Port inventories expected to enter fast destocking in April

Demand Side

• Downstream buyers show resistance to high EG prices

• Polyester operating rates recovering slowly

• Contract purchasing remains dominant; spot buying on demand

Q2 Outlook

The EG market is expected to stay strong in the second quarter, supported by:

• Persistent supply contraction

• Gradual demand recovery

• Geopolitical support

Risks to monitor:

• US‑Iran tensions

• Domestic macro policy adjustments

• Weak textile and garment export orders

Overall, the EG market will likely maintain a volatile upward trend in the near term, with price gains potentially slowing as levels move higher.

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