On September 1st, spot liquidity tightened extremely, coupled with the ongoing stalemate between the US and Iran, short-term import replenishment was hopeless, and the risk of tight docks continued to rise. The resonance between reality and expectations strengthened. The mainstream spot price in East China closed at 10445 yuan/ton,+45 yuan/ton; South China spot closed at 10030 yuan/ton,+95 yuan/ton; CFR China closed at $1255/ton, temporarily stable.

Supply side: The 900000 ton ethylene glycol/diethylene glycol plant in Jiangsu has successfully restarted recently, with a current load of 70-80%. Due to the lack of substantial lifting of the blockade in the Middle East situation, the short-term passage through the strait has led to a shortage of imported goods from the Middle East; Taiwan’s equipment will resume supply in September; Domestic equipment has increased its load due to improved efficiency, and some factories have restarted, resulting in increased supply. According to statistics, as of August 31st, the inventory of diethylene glycol ports in East China was 4300 tons, an increase of 700 tons from the previous cycle. This cycle (September 1-7), Zhangjiagang Diethylene Glycol has no planned arrival volume at the port. Last week, all domestic and overseas goods have been stored in the warehouse.
Demand side: The news of reduced production in the polyester sector has been released, and the comprehensive load of polyester in September has dropped to around 78%. It is estimated that the monthly average load of polyester in September will be around 77%, and the overall UPR production will be 30%. We will pay attention to the follow-up of terminal inventory replenishment. According to statistics, as of August 27th, the average weekly production of unsaturated resin factories in China was 33%. In terms of dock shipments, from August 24th to 30th, the total amount of shipments from the main ports in East China, Changjiang International and Fubao Warehouse, was 1257 tons, with an average daily shipment of about 180 tons. On August 31st, the total shipment volume from Zhangjiagang’s two storage areas was 75 tons, a decrease of 105 tons compared to last Sunday’s average shipment.
On the cost side: The United States and Iran have once again experienced a low-intensity military conflict, and market concerns about supply risks have once again increased. At the same time, there is still no sign of full opening of the Strait of Hormuz, which provides positive support for oil prices and leads to an increase in international oil prices.
Market outlook: In the short term, macro news is still fluctuating, import supply is temporarily unavailable, and terminal inventory is difficult to effectively accumulate in September. Short selling risks still exist under the background of delivery. However, with the restart/negative load of domestic equipment, concerns about supply shortages on the demand side are slowing down, and the expected volatility of diethylene glycol prices in September is still significant, so caution is still needed.