In the mainstream market, MEG prices closed weaker in the previous trading session, experiencing a volatile downturn. Recent market dynamics have been characterized by persistently weak supply-demand fundamentals. Coupled with ongoing geopolitical uncertainties, market participants have adopted a cautious, wait-and-see approach. Throughout the day, MEG futures remained under pressure in a weak and consolidating pattern, leading to a slight downward shift in the spot price settlement levels.
**Key Market Drivers**
**1. Cost Factors:**
Geopolitical tensions have significantly bolstered crude oil prices, providing stronger cost support for MEG. Anticipation of potential US military action in the Middle East has raised concerns over supply disruptions. Consequently, both European and US crude futures have rallied for three consecutive sessions, with Brent crude surpassing the $70 per barrel mark. This sustained increase in upstream costs continues to elevate the cost floor for MEG production.
**2. Supply Factors:**
The domestic MEG operating rate currently stands at 60.66%. A modest increase was observed recently, driven by the restart of several maintenance units. Furthermore, with multiple additional plants scheduled to resume operations, industry supply is expected to rise further in the near term, keeping market sentiment subdued.
**3. Demand Factors:**
Downstream demand continues to weaken seasonally. The operating rates for polyester and weaving sectors have declined to 81.05% and 41.20%, respectively. With the Spring Festival holiday approaching, a further reduction in operational activity across these key consuming industries is anticipated, exerting additional pressure on MEG demand.
**Market Outlook**
Despite weak fundamentals, geopolitical risks are introducing new upward momentum. The recent sharp overnight surge in crude oil prices, driven by escalating Middle Eastern tensions, has significantly strengthened cost support for MEG. This has enhanced the potential for short-term upward movement in the MEG market.
However, a market sentiment survey reveals a prevailing cautious outlook. Approximately 78% of industry participants expect prices to remain in a weak consolidation phase in today’s session. The forecast suggests spot prices may hover around 3,880 RMB/ton, representing a potential increase of approximately 47.5 RMB/ton compared to the previous close. The market appears poised for a tug-of-war between persistent fundamental weakness and the strengthening influence of cost-driven factors.
Post time: Jan-30-2026