Report Industry Investment Rating - Not provided Core Viewpoints of the Report - The current decline in ethylene glycol started in early September and has continued until now, mainly due to oversupply caused by high operating rates, new device production, and increased imports. The demand has remained tepid in the second half of the year. After the news of Yulong Petrochemical's planned production in early September, the market started trading the inventory accumulation cycle after the National Day. Currently, the profit of ethylene glycol has been significantly compressed, leading to unscheduled maintenance and load reduction in the industry. With profits remaining low, further production cuts are expected, and combined with the expected decline in overseas imports, the inventory situation is likely to improve. Therefore, ethylene glycol is currently in a bottom - building stage, and the risk of its rebound should be guarded against [1][4][5][13]. Summary by Relevant Catalogs 1. Review of the Current Decline - **Supply Side**: Since this year, except during the maintenance season, ethylene glycol has maintained relatively good profits throughout the year, resulting in low willingness for active production cuts and a high overall operating rate in recent years, with high factory inventories. In the second half of the year, there has been a large amount of new production capacity. For example, Zhengdaikai's 600,000 - ton capacity was put into production in the middle of the year, and Yulong Petrochemical's 800,000 - ton and Yichang's 200,000 - ton devices will be put into production at the end of the year. After the power disturbance in Saudi Arabia ended, the import volume to China increased explosively starting from October [4]. - **Demand Side**: Although the export tariff pressure on chemical fibers has decreased, and the load has remained at a high level since the end of the third quarter, the load of bottle chips has been limited by inventory and production capacity pressure, remaining at around 70%. As a result, the polyester operating rate has been stable, and the ethylene glycol market has been mainly affected by supply factors [4]. - **Inflection Point**: After the news of Yulong Petrochemical's planned production in early September, which was nearly two months earlier than the initial market expectation, ethylene glycol broke through the support level and declined. Even though the inventory dropped to the lowest level of the year in September, the market still anticipated the inventory accumulation cycle after the National Day. With the increase in the arrival volume after the National Day, the inventory accumulation cycle began, and ethylene glycol continued to decline [5]. 2. The Industry Starts Production Cuts, and the Decline Meets Resistance - **Profit Compression**: After the decline from the high level, the profit of ethylene glycol has been significantly compressed. The profit of naphtha - based ethylene glycol has dropped to the lowest level of the year, and the profit of coal - based ethylene glycol has dropped to the lowest level since 2024. In the United States, under the dual pressure of rising ethane costs and falling ethylene glycol prices, the profit has fallen below the lowest level in 2023 [13]. - **Production Cuts**: Due to profit pressure, the industry has started unscheduled maintenance and load reduction. Overseas, the United States has also carried out maintenance and production cuts. As profits continue to be low, further production cuts in the industry are expected, and combined with the expected decline in overseas imports, the inventory situation is expected to improve. Currently, ethylene glycol is in a bottom - building stage, and attention should be paid to the risk of its rebound, especially if there are further production cuts in the industry, which may reverse the balance sheet expectation [13].