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On August 18, with very few vessel arrivals remaining for the month, the risk of a port-side short squeeze continued to rise, driving market prices higher. Mainstream spot prices closed at 9,935 RMB/ton in East China (up 190 RMB/ton) and 9,880 RMB/ton in South China (up 215 RMB/ton); CFR China prices closed at $1,075/tonne (up $12/tonne) and $1,135/tonne (up $25/tonne).
Supply side: Few vessel arrivals are scheduled to the remainder of the month, and the tight supply situation persists. Regarding September arrivals, market attention is focused on cargo releases from the Middle East and supplies from nearby regions. Domestically, Hengli Petrochemical has restarted operations (having already fed feedstock into the unit), while Shenghong is expected to restart in late August; meanwhile, the risk of a short squeeze at the terminals continues to rise. As of August 17, port inventories of diethylene glycol (DEG) in East China stood at 5,100 tonnes, a decrease of 2,050 tonnes from the previous reporting period. to the current week (August 18-24), 1,000 tonnes of deep-sea DEG cargo are scheduled to arrive at Zhangjiagang Port.
Demand side: Raw material costs remain high, resin plant operating rates have softened slightly, and polyester operating rates remain stable however low. Statistics show that as of August 6, the average weekly operating rate of domestic unsaturated resin vegetation stood at 32%, with overall capacity utilization declining slightly compared to the previous period. Regarding terminal shipments, the total volume from the Yangtze International and Vopak storage areas at major East China ports was 2,919 tonnes between August 10 and 16, averaging 417 tonnes per day. On August 17, total shipments from the two Zhangjiagang storage areas amounted to 330 tonnes, a decrease of 87 tonnes from the previous week's daily average.
Cost side: Significant differences exist between the U.S. and Iran regarding the Strait of Hormuz, and with the U.S. planning to intensify economic sanctions and the two sides deciding not to extend the validity of their memorandum of understanding, market concerns over supply risks have heightened, driving up international oil prices.
Market Outlook: In the short term, diethylene glycol (DEG) prices remain driven by terminal supply; coupled with the closure of inter-regional arbitrage windows, domestic prices are tracking this direction and are poised to enhance further, mirroring the dynamics of the delivery market. However, prices remain susceptible to the situation in the Middle East, keeping price risk elevated; market participants should continue to monitor conditions in key shipping straits and subsequent shifts in demand.
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