SunSirs: Lacking Substantial Positive Catalysts, the Diethylene Glycol Market Was in a Stalemate, Undergoing Consolidation

On May 12, following a rebound from the previous day's lows, the domestic diethylene glycol market lacked fresh momentum; with holders showing little inclination to offload inventory at low prices, the market entered a phase of stalemate and consolidation. In the mainstream spot market, prices in East China closed at 6,690 RMB/ton (+10 RMB/ton); the overall sentiment in the South China market remained cautious, with prices holding steady to close at 6,850 RMB/ton (unchanged); CFR China prices closed at 819 USD/ton (+1 USD/ton).

Fundamental Analysis:

Supply: As of May 11, port inventories of Diethylene Glycol (DEG) in the East China region stood at 21,100 tons, an increase of 3,100 tons compared to the previous statistical period. This week (May 12–18), scheduled DEG arrivals at Zhangjiagang total 3,770 tons. Downstream operating rates for unsaturated resins have risen slowly following the holiday period, leading to an increase in shipments from major ports; coupled with the relatively low volume of scheduled arrivals this week, inventories at major East China ports are expected to experience a slight drawdown.

Demand: Following the holiday period, operations at downstream manufacturing plants have been slowly resuming, and shipment volumes from major ports have shown an uptick. According to statistics, the operating rate of domestic unsaturated resin plants stood at 20% during the holiday—a decline of 13% compared to pre-holiday levels. Since returning from the break, key production facilities have gradually resumed operations; consequently, the average operating rate across factories has been slowly rising, accompanied by an increase in shipment volumes from major ports. Specifically, statistics indicate that from May 9 to May 10, the total shipment volume from the two storage zones in Zhangjiagang amounted to 1,898 tons, averaging 949 tons per day. On May 11, the total shipment volume from these two zones reached 973 tons, representing an increase of 124 tons compared to the previous day.

Costs: Iran has rejected the U.S. ceasefire proposal, a response that Trump deemed "completely unacceptable"; with the risk of escalation in the Strait of Hormuz, crude oil futures in the U.S. and Europe continue to rise.

Market Outlook:

The situation in the Middle East continues to unnerve the market; Iran has rejected the U.S. ceasefire proposal, and significant divergences remain in the negotiations between the two sides, fueling market concerns that the conflict remains at risk of escalation. In the short term, the market is characterized by tight supply and rising essential demand; consequently, the Diethylene Glycol (DEG) market has staged a rebound from recent lows, and overall market sentiment has improved.

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