Deteriorating Ethylene Dichloride Demand Results in Slow Offtakes On Purchasing Activities
- 22-Jul-2022 4:53 PM
- Journalist: Nicholas Seifield
Hamburg, Germany- Market fundamentals of Ethylene Dichloride (EDC) in the US and Europe remain muted with weak purchasing and deterred cost support. Feedstock Ethylene prices remain affected by the region's sluggish energy and Naphtha values. Both Ethylene and Ethane remain closely aligned with Natural Gas which saw pricing moderate some but holding near $7.8/BTU. With the week ending on 15th July, the price of EDC in the USA slipped to USD 832/ton FOB USGC.
Westlake's Plaquemine plant in Louisiana had a turnaround in mid-June, prompted by deteriorating demand for new stock. The facility produces roughly 862,000 mt/yr of PVC, supplied upstream by VCM, ethylene dichloride, and chlorine. In terms of downstream fundamentals, the PVC market remains affected by rising inventories and a weak demand outlook. Falling export pricing of PVC as competition increases from lower Asian prices are putting some offers down.
In Germany, slow offtakes and a lackluster trading environment affect the price trend. Downstream Polyvinyl Chloride (PVC) deals also decline. Still, elevated natural gas and power costs have capped more significant decreases from sellers. Demand has already lagged behind seasonal hopes since early Q3, while the long break will likely dim activity further in August. This week has seen price cuts due to sluggish demand and falling feedstock ethylene costs.
According to ChemAnalyst, the price of Ethylene Dichloride (EDC) will decline in the forthcoming weeks due to affected Naphtha and Natural Gas values in the region. Slowing market demand and accelerating inventory growth will further decrease the product prices in European and US markets. The price erosion will also remain supported by poorer performing downstream PVC market. However, Europe had boosted its PVC exports to Turkey to preserve their margin in their region. High freight charges with lackluster demand will pressure the producers to clear their existing inventories by giving discounts on their products.