Why MEG Buyers Suddenly Stopped Buying After Weeks of Strong Demand

The Monoethylene Glycol (MEG) market in China saw a significant shift in buying behavior during May 2026, moving from strong demand-driven purchasing to a noticeable slowdown in procurement activity. The change has been driven by easing feedstock pressure, improving supply expectations, and weakening downstream consumption in the polyester sector.

Earlier price strength was supported by tight ethylene availability and concerns over supply disruptions. Production constraints at Zhejiang Petroleum & Chemical, which reduced output by approximately 20% during March 2026 due to maintenance and crude-related limitations, contributed to tighter ethylene supply conditions and higher MEG production costs.

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Further pressure came from geopolitical uncertainty around the Strait of Hormuz, which raised concerns about ethylene and naphtha supply flowing into Asia. This led to precautionary buying activity and inventory buildup across traders and downstream industries.

Market correction phase

The market later corrected as MEG prices reached elevated levels, and buyers resisted higher replacement costs. Sentiment weakened further following ceasefire developments in the Middle East, which eased crude oil expectations and reduced concerns around feedstock disruptions.

With ethylene and naphtha costs softening, buyers delayed fresh purchases and shifted toward inventory consumption rather than replenishment.

Downstream demand impact

Polyester manufacturers initially increased procurement following post-holiday production recovery. However, slowing textile export demand, particularly from Europe and Turkey, led to rising inventories and reduced purchasing urgency.
This resulted in cautious buying behavior across the polyester value chain, with importers also postponing procurement decisions in anticipation of further price softening.

Market outlook

The near-term direction of MEG remains uncertain due to volatile crude oil trends and uneven demand recovery in the textile sector.
The key question is whether current weakness reflects short-term inventory correction or the beginning of a longer structural slowdown in polyester chain demand.

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This release was published on openPR.