The ongoing Middle East conflict, escalating since late February 2026 with the Strait of Hormuz effectively restricted or blocked, has severely disrupted global petrochemical flows. Major producers including Saudi Aramco, SABIC, Qatar Energy, Singapore PCS, Indonesia Chandra Asri, and South Korea Yeochun NCC have issued force majeure declarations or implemented substantial production cuts/shutdowns due to feedstock shortages (e.g., naphtha) and export blockages. This has tightened ethylene glycol (EG, also known as MEG or monoethylene glycol) supply expectations dramatically.
On March 6, 2026, Dalian Commodity Exchange ethylene glycol main futures contract surged over 4% intraday, peaking at around 4399 CNY/ton. From February 28, the contract posted a weekly gain exceeding 18%, making EG one of the most geopolitically sensitive products in the polyester chain.
Why Ethylene Glycol Is the Most Vulnerable in the Polyester Chain
Ethylene glycol stands out as the polyester industry’s most directly impacted raw material due to a triple threat: high import dependence, concentrated Middle East sourcing, and reliance on a single chokepoint route.
Global and China EG Supply Landscape
Global ethylene glycol capacity stands at approximately 58-59 million tons (2025 figures), with Asia holding ~67% and the Middle East ~19% as the key low-cost export hub. The Middle East exported ~7.6 million tons of MEG in 2025 (out of ~12.4 million tons globally), with ~90% heading to Asia-Pacific.
China, the world’s largest polyester producer, has an EG import dependence of ~27-28% (down from prior years due to domestic capacity growth). Critically, ~65-66% of imports originate from the Middle East, with Saudi Arabia alone accounting for ~53-55% in recent data. In 2025, China imported ~5.03 million tons from the Middle East (total imports ~7.7 million tons).
Exports from Saudi Arabia, Iran, Oman, Kuwait, and others must transit the Strait of Hormuz—the vital artery for Middle East petrochemicals. Restrictions, rerouting via longer paths (e.g., around Africa), soaring war risk premiums, and halted tanker traffic amplify supply fears.
Asian Producers Hit Hard: Force Majeure Wave
- Singapore PCS and Indonesia Chandra Asri declared force majeure early March due to naphtha/ feedstock disruptions.
- South Korea Yeochun NCC followed, cutting output and issuing force majeure notices.
- Similar actions from other regional crackers exacerbate the tightness in EG and related olefins.
Supply Squeeze + Cost Push: Fueling a Potential Uptrend
Supply side: Direct hits to imports from the Middle East create strong contraction expectations for China’s market. Prolonged conflict risks broader production halts and delayed deliveries.
Cost side: Surging crude oil (driven by regional tensions) raises feedstock costs for EG production (via ethylene oxide hydration or other routes), providing solid cost support.
Trade reconfiguration: Rerouting, delays, and higher freight/war premiums widen regional imbalances. Short-term volatility stems from supply fears; longer-term, persistent shortages could spark a sustained upward cycle in EG prices.
Domestic Leaders Shine: Rongsheng Petrochemical Leads with Scale
China’s EG industry remains fragmented, but top integrated players benefit most from price rallies and supply stability.
Rongsheng Petrochemical tops private firms with 2.4 million tons/year EG capacity (part of its massive Zhoushan refining-petrochemical complex). Followers include Shenghong Refining (~1.9 million tons/year) and Satellite Chemical (~1.82 million tons/year).
These integrated giants—with full-chain advantages, cost controls, and Aramco partnerships—capture volume-price gains, boost profits, and accelerate consolidation. Industry concentration is poised to rise amid volatility.
This crisis underscores global supply chain fragility in petrochemicals, particularly for EG derivatives used in polyester, antifreeze, and surfactants.
At Book-Chem.com, we offer reliable supplies of high-quality surfactants and related intermediates resilient to upstream fluctuations. Secure your needs with our premium products: https://book-chem.com/surfactant.
The ethylene glycol surge driven by Strait of Hormuz disruptions highlights risks in raw material chains—rely on Book-Chem.com for stable surfactant solutions in turbulent markets.
