Entering September 2025, despite downstream polyester industry expectations for consumption recovery during the traditional "Golden September, Silver October" period, multiple factors including anticipated new facility startups, rising capacity utilization rates at existing plants, and low port inventory accumulation are creating a challenging outlook for the ethylene glycol market. On September 2, news of imminent new capacity coming online triggered a 1.2% decline in East China spot prices and a 2.23% drop in DCE main contract futures, reigniting bearish sentiment. What's the outlook for ethylene glycol?
**I. "Golden September, Silver October" Seasonal Expectations Support Demand Recovery**
Each year from September to October, the textile and apparel industry enters its traditional peak production season, with polyester and weaving companies beginning concentrated stockpiling ahead of autumn and winter orders, driving seasonal recovery in ethylene glycol demand. Prior to the 2025 "Golden September, Silver October" period, market expectations for demand recovery remain relatively strong. Although the first half of 2025 saw "export rushing" phenomena during the China-US tariff "truce period," with some orders released ahead of schedule creating partial demand overdraft for the second half, the polyester industry maintains relatively high growth rates for the full year.
As of September 4, the comprehensive operating rate for chemical fiber weaving in Jiangsu and Zhejiang regions reached 62.42%, up 0.44% from the previous period. Terminal weaving order days averaged 13.89 days, increasing 1.17 days from the previous week. Entering September, order conditions at major domestic weaving production bases have shown some improvement. With new orders gradually being placed, inventory has achieved modest destocking, though current terminal weaving finished goods inventory levels remain relatively high. Most weaving manufacturers focus primarily on fulfilling existing orders, and due to sufficient previous inventory stockpiling, current production and restocking willingness remains weak, maintaining cautious expectations for the traditional "Golden September" market. Looking ahead, the weaving market will primarily focus on order fulfillment, with industry operations running relatively warm. Driven by peak season expectations, polyester companies' enthusiasm for purchasing ethylene glycol on dips has increased, providing periodic support for spot prices.
**II. New Facility Startups and Existing Capacity Increases Drive Significant Supply Pressure Recovery**
In stark contrast to demand-side "Golden September, Silver October" recovery expectations, the ethylene glycol supply side faces concentrated pressure release. The highly anticipated Yulong Petrochemical 800,000 tons/year ethylene glycol facility has entered startup preparation phase, with preliminary plans for trial runs in late September. Although this facility's startup is within market expectations, the front-loaded impact of supply increases has been fully reflected in price trends, becoming an important factor suppressing ethylene glycol price appreciation.
Currently, domestic ethylene glycol comprehensive operating rates have climbed to 68.46%, at relatively high levels in recent years, with coal-to-ethylene glycol route operating rates exceeding 70%. Against the backdrop of continuously improving coal-to-ethylene glycol profit margins, some companies have actively increased capacity utilization, with individual facilities operating at above-capacity levels. Meanwhile, Xinghang Energy's previously long-idled 400,000 tons/year facility has also initiated restart procedures, signaling significant reduction in industry idle capacity. Additionally, EO/EG co-production facilities, amid persistently weak EO demand, tend to maximize ethylene glycol output to maintain overall profitability, further intensifying ethylene glycol supply pressure. Comprehensively, domestic ethylene glycol production is expected to reach new highs in the short term, with concentrated supply-side releases providing sustained market suppression.
**III. Port Inventories Hit Year-Low as Supply-Demand Shifts Toward Accumulation**
Despite gradually rising supply pressure, ethylene glycol port inventories remain at relatively low levels, providing some market support. Recent reductions in imported cargo arrivals have led to continuous declines in East China main port inventories. According to Longzhong Information data, as of September 4, 2025, total East China main port ethylene glycol (MEG) inventory stood at 376,300 tons, down 13,300 tons from September 1 and significantly down 36,900 tons from August 28. Main port inventories have fallen below 400,000 tons, reaching new lows for 2025. Under current low inventory baseline conditions, even if entering an accumulation cycle later, its substantial bearish impact on the market remains relatively limited, continuing to provide short-term price support.
From an inventory trend perspective, the ethylene glycol market maintained an overall "destocking" pattern in the first half of 2025. With second-half new facility startups gradually materializing (such as Yulong Petrochemical's 800,000-ton facility trial run), existing facility capacity utilization increases, and overseas supply recovery, a dual domestic and import increase pattern is gradually emerging, with supply-side incremental pressure progressively accumulating. Supply-demand structure is shifting from first-half "supply shortage" toward "oversupply," with the market gradually transitioning from "destocking" cycle toward "accumulation" phase. As fourth-quarter new capacity concentrates releases and imports return to normal levels, ethylene glycol accumulation speed is expected to accelerate, with late 2025 to early 2026 potentially welcoming a round of obvious inventory accumulation. At that time, if terminal demand fails to improve effectively, inventory pressure will again become the core factor suppressing prices.
**IV. Summary**
Comprehensively, the current ethylene glycol market exists in a complex pattern of "demand expectations, supply pressure, inventory support but weakening trends." Short-term, "Golden September, Silver October" seasonal expectations continue providing some price support, combined with low inventory backdrop, ethylene glycol prices may maintain range-bound oscillation patterns. However, from a medium-to-long-term perspective, as new facilities successively start up, existing capacity utilization rates increase, and imports recover, supply pressure will continue releasing, while weak terminal consumption recovery and rising polyester negative feedback risks mean demand-side performance will struggle to exceed expectations.