Amidst Descalating Downstream Demand, Ethoxylates Prices Tumble at the Start of 2023

Following a year of severe volatility in the petrochemical industry, the market participants are cautious about a rise in the manufacturing capacities in the regional markets. The price easing partly reflected weak demand as the production rates of several commodities, including Ethoxylates, remained under pressure amid affordability and availability constraints. The industry has largely been affected by supply-side issues, including a European production shortage, disruptions due to sanctions on Russia, and trade restrictions in China due to COVID policies.

Natural gas prices are one of the crucial factors affecting the operational costs of chemicals, including Ethoxylates, especially in Europe, where production of Ethoxylates was diminished because of elevated natural gas prices. Now, natural gas prices have declined, and market players speculate that the European winter has been colder than usual, which may cause natural gas supplies to decline and prices to rise again. On the demand side, procurement from the downstream surfactant and detergent industries was sluggish in the German market. In addition, cargo rates and volumes have continued to be soft; however, the rate of contraction in transportation prices slowed with the onset of the first quarter of 2023. The ChemAnalyst database has shown that Ethoxylates prices have settled at USD 2195 per tonne in the week ending January 6, 2023.

Furthermore, the weaker demand from the downstream surfactant and detergent industries has weighed on market sentiment in China. The congestion has eased at key ports, and overall vessel utilization is low. The freight charges across Asia and international markets have also decreased, supporting the decline in the price realizations of Ethoxylates in the domestic region. Consequently, the price of Ethoxylates has plummeted by approximately 2.2% in the Chinese domestic market.

According to ChemAnalyst, Ethoxylates prices are expected to fall due to weak demand and lower production costs in regional markets. The drop in natural gas costs and falling freight rates across the Asian and European markets will likely cause a downward shift in Ethoxylates prices in the forthcoming weeks.