China’s MEG prices went up sharply earlier because there wasn’t material in some parts of Asia and people were worried about Ethylene. Buyers rushed to buy cargoes because they thought prices would go up more. A big refinery in China, Zhejiang Petroleum & Chemical reduced production by 20% in March 2026 because of maintenance and low crude oil availability. This made Ethylene, and feedstock for MEG, scarce in China.
Problems around the Strait of Hormuz made people worry about Ethylene supplies from the Middle East to Asia.
Freight uncertainty and tight Ethylene supply made MEG production more expensive, so traders stocked up.
Ceasefire News Eases Pressure on MEG Market
Later the market started correcting after MEG prices in China reached elevated levels and buyers resisted higher replacement costs. The MEG price trend in China shifted downward during May 2026 as sentiment improved following ceasefire developments, reducing fears of supply disruptions and easing crude oil prices from earlier highs.
Ceasefire developments around Iran also reduced concerns over possible disruptions in the Strait of Hormuz, lowering pressure on crude, Naphtha, and Ethylene costs linked to MEG production. As feedstock sentiment weakened, buyers expected further softening in the MEG price trend in China and delayed fresh procurement activity.
Downstream Buyers Started Pulling Back
Polyester producers accepted offers at first because they were producing well after a holiday. However, when textile orders slowed down, they started to have much inventory. Buyers across the polyester chain stopped buying much because they had already bought enough material earlier.
Some importers delayed bookings because they saw weaker demand for Ethylene and Naphtha.
Slower export inquiries from textile buyers in Europe and Turkey also reduced urgency among polyester plants.
Near-Term Outlook for China MEG
The near-term direction for MEG stays uncertain as crude oil prices are unstable and textile orders are slow.
The big question is; Is the current slowdown caution from buyers or is it the start of a longer adjustment in demand across the polyester chain?
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