Platts Chemical Trends H1 2026
Platts Chemical Trends H1 2026
Glycols
Global glycols trade flows shift from China amid trade tensions
- US exports in flux as spot hovers around parity
- China capacity underutilized, imports stay high
- Europe focuses on future antidumping duties case
US-China trade tensions put US exports in flux
The first half of 2026 poses the US ethylene glycol market with the question of where to reallocate supply formerly consumed in China.
Since consumers in China halted imports of US EG amid deteriorating trade relations, US-based sellers must redirect an estimated 1 million metric tons of monoethylene glycolglycol. Prior to the trade dispute, China as the world's largest consumer, imported about that much MEG annually.
Typical export alternatives for US-based sellers, such as Turkey, Egypt and Western Europe, are considerably smaller markets and are unable to absorb the demand that previously came from China.
As a result, MEG spot prices fell to an 18-month low of 18 cents/lb FOB US Gulf Coast in April 2025 after remaining rangebound at 21.55-22 cents/lb in the first quarter, according to Platts assessments from S&P Global Energy.
However, spot prices rebounded in the second half of May following a force majeure at Lotte Lake Charles, climbing back to 21 cents/lb on June 27 before falling 4 cents, or 21%, from July 3 to Dec. 12, with December spot prices reaching a five-year low, according to Platts data.
India consumes about 40,000 mt/month of MEG, which is about 44% of Chinese consumption, according to two traders. Although the Indian government lifted import restrictions on global EG, US-based sellers are skeptical that any one country could fully replace China.
Non-integrated producers in the US are under particular pressure to idle, one of the traders said, with supply growing longer and prices nearing a floor.
With export volumes falling, US-based producers, meanwhile, have had to reduce production to manage inventory levels.
Nan Ya, a subsidiary of Formosa Plastics, shut down EG production at its 360,000 mt/year EG1 plant in Point Comfort, Texas, a source familiar with company operations said, with no restart date yet announced.
At least two other producers on the USGC are operating at reduced rates, according to multiple participants, although only one unit is fully idled.
China can expand domestic output amid low imports
MEG plants in China remain underutilized, with operating rates averaging 55%-65% in 2025. Rates are likely to remain at similar levels in 2026 amid myriad factors, including upstream crude oil and ethylene costs, coal prices, environmental concerns, and downstream polyester and PET demand, market sources said.
The cost advantages of MEG production in the Middle East and North America have provided a more economical way for China to meet its MEG demand.
China’s MEG imports totaled
6.3
million mt
from January to October 2025
China’s imports of MEG totaled 6.3 million mt from January to October 2025, up 16% on the year, according to Chinese customs data. Many of these imports from Saudi Arabia, Canada and Taiwan increased significantly on the year.
But with continued expansion of downstream polyester capacity in China, curtailed US volumes due to trade tensions could prove problematic, Sally Fu, director of China olefins research at S&P Global Energy CERA, said.
Several market participants expect China will continue to fulfil its consumption requirements through imports, looking to the Middle East, Taiwan, South Korea and Malaysia in lieu of US volumes. However, China will have to compete with Europe for those volumes.
Europe moves to protect market position
Europe is primarily focused on the November 2026 expiry of antidumping duties applied to US and Saudi Arabia MEG, implemented in November 2021. Reviews of the duties typically need to occur at least three months prior and are usually started around six months beforehand, meaning a review would likely take place between May and August.
The broad market expectation is that the duties will be renewed. However, there is less certainty regarding what revised duties could look like.
There is a possibility that duties applied to all industrial goods from the US might be scrapped; if that is the case, Europe-based producers anticipate this will make European material even less competitive.
As with other regions, the primary concern heading into 2026 in Europe is oversupply and how much of that glut Europe-based producers can supply, with so many low-cost producing regions looking to find a home for their EG.
Where the outlook in Europe differs to China, though, is demand coming from downstream markets, namely polyethylene terephthalate, where sources expect limited opportunity for recovery in 2026.
Contributors: Sagar Baul, Carla Bridi, Benjamin Brooks, Rosa Castaneda, Heng hou Cheong, Alejandro Chávez, Fumiko Dobashi, Ashish Dhyani, Davi Dos santos, Leo Engels, Yasmeen Feghali, Alex Fiedosiuk, Isaac Foong, Haitian Fang, Charlene Goh, Jing Kang Goh, Talissa Gomes, Zhi Xuan Ho, Joe Higginson, Gustav Inge Holmvik, Hui Heng, Deja Harrison, Zhi yi Tan, Kamna Kapoor, Tareen Kazi, Sunaina Kura, Keith Mackrell, Andre Mikhail, Mainak Moitra, Daniela Morales pumarino, Esther Ng, Finlay Oriordan, Ashley Peh, Iris Poon, Pankaj Rao, Yazu Romero, María Rosales larios, Baran Serdaroglu, Zong Ming Shin, Archit Singh, Dyvia Shah, Maria-Eleni Tsimeki, Fernando Tiscareno, Karina Trevizan, Chichi Ubani, Luke Warren, Mujidah Yahaya, Nate Zhang
Editors: Marieke Alsguth, Jim Levesque, Benjamin Morse, Derek Sands
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