Diethylene Glycol (DEG) is a colourless, hygroscopic, low-volatility glycol produced as a co-product during the hydration of Ethylene Oxide in Ethylene Glycol manufacturing. The upstream value chain is linked to petrochemical feedstocks such as Ethylene derived from naphtha or ethane cracking, followed by Ethylene Oxide production. Due to its strong solvency, moisture-absorbing properties, and chemical reactivity, DEG is widely used in unsaturated polyester resins, plasticisers, polyurethane systems, solvents, gas dehydration fluids, and various industrial formulations.

Major end-use industries include construction and infrastructure, paints and coatings, composites and fiberglass, automotive, packaging, oil and gas, and textiles.

Key Industrial Applications

  • Unsaturated Polyester Resins (UPR)
  • Plasticisers
  • Polyurethane systems
  • Solvents for dyes and resins
  • Humectants and textile processing
  • Gas dehydration fluids
  • Brake fluids and antifreeze blends

Middle East Tensions Drive Price Increase

DEG prices across the Asian market are currently witnessing an upward trend, primarily driven by escalating geopolitical tensions in the Middle East involving the United States-Israel, and Iran. These developments have increased volatility in global energy markets and strengthened upstream petrochemical costs, which in turn has supported the recent price rise.

In the China domestic market, prices have increased sharply amid tightening supply sentiment and higher feedstock values. Market sources indicate that China prices have increased by approximately $50-65/MT in recent days. Similarly, domestic producers in India have also implemented price hikes in response to rising input costs, supply-side adjustments, and strengthening regional market sentiment.

For the latest confirmed price levels in the Indian, Chinese and global markets, kindly reach out to the ALCHEMPro Team.

Technical Market Movement Analysis

Sharp Downtrend (May 2025 - December 2025)
Between early May and late December 2025, DEG prices experienced a significant correction across Asia.

India – Hazira

  • Decline: 0.827 - $0.479 /Kg
  • Absolute drop: $0.348 /Kg
  • Percentage fall: ~42 per cent

India – Kandla

  • Decline: 0.821 - $0.471 /Kg
  • Absolute drop: $0.350 /Kg
  • Percentage fall: ~43 per cent

FOB China

  • Decline: 0.605 - $0.422 /Kg
  • Absolute drop: $0.183 /Kg
  • Percentage fall: ~30 per cent

Technical Interpretation

The sharp decline observed during 2025 reflected several market fundamentals:

  • Oversupply conditions across the Asian petrochemical market
  • Weak downstream demand from resin, construction, and coatings industries
  • Softer Ethylene Oxide feedstock values
  • Inventory liquidation toward the year-end period
  • Competitive Chinese export cargoes exerting pressure on Indian domestic prices

The steeper decline in India compared to China suggested higher domestic inventory levels and reduced consumption across polyester resin and plasticiser segments.

Cost Structure and Feedstock Influence

DEG pricing remains closely linked to key upstream components including:

  • Ethylene
  • Ethylene Oxide
  • Crude oil derivatives
  • Energy and production costs

During mid-2025 and early 2026, softer crude oil prices reduced upstream cost pressure, allowing integrated producers to adjust pricing in order to sustain offtake levels. Additionally, export-oriented Chinese producers contributed to regional price alignment across Asian markets.

However, later in March 2026, the DEG market began moving upward mainly due to escalating geopolitical tensions involving the United States, Israel, and Iran in the Middle East. The conflict has increased uncertainty in global energy markets and supported higher crude and petrochemical feedstock prices. In addition, rising energy costs and firmer upstream petrochemical values have further contributed to the strengthening price trend for DEG across the Asian market.

Market Outlook

The outlook for the Asian DEG market remains firm in the near term, supported by rising upstream petrochemical costs and ongoing geopolitical tensions in the Middle East, which continue to influence global energy markets. Higher feedstock prices, particularly Ethylene and Ethylene Oxide, are expected to keep cost pressure elevated for producers.