Glycols and Glycol Derivatives: 2026 Market Outlook

Macroeconomic and Industry Environment: Slow Growth and Structural Length

Global macroeconomic indicators suggest a subdued yet moderately improving landscape in 2026. The IMF's January 2025 update projects global GDP growth of roughly 3.3 percent in both 2025 and 2026. The World Bank expects Latin America and the Caribbean to expand at approximately 2.3 percent in 2025, with a slight increase to roughly 2.5 percent in 2026–27, indicating a gradual improvement but still modest demand for glycols in the region. U.S. forecasts, including the Philadelphia Fed's Survey of Professional Forecasters, estimate real GDP growth at approximately 1.8 percent in 2026, consistent with slow but positive demand in the packaging, construction, automotive, and industrial sectors. Deloitte's 2026 chemical-industry outlook describes the sector as operating in a prolonged downcycle, with global chemical production growth revised down to around 2 percent for 2026 due to weak industrial activity, trade friction, and persistent overcapacity.

Taken together, these indicators imply mild macroeconomic growth, structurally long chemical markets, and limited pricing power for commodity glycols unless capacity rationalization accelerates or feedstock costs rise unexpectedly.

Monoethylene Glycol (MEG): Americas Outlook for 2026

MEG enters 2026 with the Americas market already well-established. Reports from late 2025 indicate healthy operating rates, plentiful export offers, and buyers deliberately increasing their exposure to spot markets, expecting the length to persist. Global MEG demand is projected to grow in the mid-single digits—around 4 to 6 percent annually through 2035—but this growth comes on top of an already oversupplied base and capacity additions that continue to outpace demand, particularly in Asia and the Middle East.

With MEGlobal's December 2025 benchmark at 28 cents per pound and U.S. Gulf export spot values in the mid-teens, 2026 appears positioned for a flat-to-soft price tone, especially in the first half of the year. Any upward movement would more likely stem from rising ethylene costs or unexpected supply outages rather than meaningful demand strength. Incremental MEG consumption will depend primarily on PET resin, polyester fibers, and antifreeze. While global growth in these areas remains solid, most of it is occurring in Asia. North American demand is more mature and expected to grow only slightly in line with GDP and packaging needs.

Downside risks include further PET margin pressure, an increase in Chinese PET or MEG exports to the Americas, and weaker U.S. economic performance. An upside could emerge from deeper rate cuts or closures in North America, or from any strengthening in PET export flows from the region. Overall, MEG in the Americas is likely to remain oversupplied in 2026, with prices driven more by feedstocks and export economics than by local demand. Contract buyers are expected to continue incorporating or expanding spot-linked components in their formulas.

Diethylene Glycol (DEG): Americas Outlook for 2026

DEG enters 2026 following a distinctly weak 2025, during which benchmarks slipped from the mid-40s to the low-30s cents per pound, and FOB U.S. Gulf barge prices fell below 20 cents per pound. Buyers consistently purchased only to meet immediate needs, and inventories remained comfortable even as producers operated normally.

Because DEG is a co-product of EO/MEG chains, its supply will remain abundant as long as MEG plants continue to operate, supporting PET and polyester demand. Given the oversupply in global MEG markets, DEG is also positioned to remain structurally long in 2026. Demand for DEG in unsaturated polyester resins, plasticizers, and industrial applications is expected to grow only slightly below or in line with GDP in North America and Latin America—roughly 1.8 to 2.5 percent in 2026—which is insufficient to meaningfully tighten balances.

Producers may resist pushing FOB U.S. Gulf values materially lower, particularly if export opportunities into India or parts of Latin America increase. Buyers can likely maintain short-term purchasing strategies in the first half of the year while continuing to negotiate for formula rebates or to avoid increases. However, any rationalization in EO production or unexpected plant outages could tighten co-products more quickly than anticipated. The most probable outcome is a 2026 DEG market that remains flat to slightly softer than it was in late 2025, with limited upside and continued margin compression.

Triethylene Glycol (TEG): Americas Outlook for 2026

TEG exits 2025 in a stable but intensely competitive position, characterized by sporadic demand even during colder weather, hand-to-mouth purchasing behavior, and multiple 5-cent increases that achieved only partial acceptance. Reports of sub-60-cent deals late in the year indicate that the market reset to a lower baseline heading into the first quarter of 2026.

TEG demand in 2026 will be driven primarily by gas dehydration. Consumption is closely tied to drilling activity, gas processing utilization, and trends in North American gas production. Modest gains in U.S. and Canadian gas output—supporting LNG development and power-sector demand—could provide some improvement, although activity in drilling and fracking is the more relevant driver. Weather conditions will remain influential: a colder-than-normal winter would likely bolster volumes, while milder conditions would likely maintain the current softness.

Given normal weather patterns and steady gas-sector activity, TEG volumes in 2026 are likely to improve modestly compared to 2025; however, price competition is expected to remain strong. Producers' attempts to raise prices in late 2025 demonstrate an interest in lifting margins, though the difficulty of securing full pass-through suggests that any gains in 2026 will be incremental and fragile. In the absence of a material upturn in gas dehydration demand, TEG prices are likely to remain near their late-2025 floor, with only limited upside.

MPG and DPG: Americas Outlook for 2026

MPG and DPG enter 2026 with higher pricing, following several 5-cent increases across the Americas in 2025, supported by modest rationalization and substantial import barriers. Dow's exit from merchant MPG production at Freeport by December 2025 removes a supply source, and tariffs of 19 percent on Thailand and 15 percent on South Korea keep most offshore MPG, and DPG offers uncompetitive prices in the United States.

Seasonal demand for MPG and DPG in antifreeze, de-icers, and industrial heat-transfer fluids is expected to remain steady, particularly if winter 2026 is colder than winter 2025. MPG consumption tied to data center cooling and industrial heat transfer systems continues to draw greater attention. USP-grade MPG in pharmaceutical and personal-care applications tends to expand in line with consumer spending. However, coatings and resins—key outlets for DPG—still face weak industrial and construction activity. Any recovery is expected to be modest, in line with the U.S. growth outlook of approximately 1.8 percent and muted global chemical production growth of around 2 percent.

The combination of Dow's Freeport closure, ongoing PO/MPG maintenance schedules, and import restrictions suggests the 2026 MPG/DPG market will be tighter than the MEG or DEG markets, though not genuinely short under baseline demand. Propylene fundamentals are expected to ease somewhat due to slower growth in the chemical sector and stable refinery operations, which may limit the potential for further price increases even if suppliers attempt to defend late-2025 levels. Your November report described the late-2025 tone as “stable to slightly soft,” with increasing room for negotiation as some buyers drew from pre-bought inventory. This dynamic is likely to persist into early 2026 until inventories normalize.

Overall, MPG and DPG appear balanced, with a slight tightening entering 2026 amid softer macroeconomic conditions. Prices are therefore likely to track sideways or modestly lower from the fourth-quarter 2025 peak, with smaller downside risk than MEG and DEG—particularly for USP and specialty grades.