EPA Advisory and Weak Downstream Demand Impact the US Ethylene Oxide Prices

As per the latest data, after stagnating in the early week of November 2022, the Ethylene Oxide prices decreased slightly by 0.6% in the US, and the Ethylene Oxide spot FOB US Gulf settled at USD 1328/MT. At the same time, weak demand for downstream Polyethylene Terephthalate (PET) due to off-season demand for bottles further reduced the Ethylene Oxide offtakes and consumption levels in November 2022.

According to the reports,  Environment Protection Agency (EPA) scheduled a virtual meeting on November 10, 2022, to share information about Ethylene Oxide emissions and risk impacts in Groveland, Florida. EPA is now identifying the communities facing high risks from commercial sterilizer facilities using Ethylene Oxide. People living near International Sterilization Laboratory near Florida in lake county are to be informed during the meeting because of their right to information regarding emissions that could affect their health and well-being.

Previously, a couple of months back, in late September 2022 EPA held a meeting regarding health risks associated with Ethylene Oxide emissions in the environment as possible exposure of the chemical to the environment could affect domestic sterilization facilities. EPA advised commercial Sterilizers to strictly follow the National Emission Standards for Hazardous Air Pollutants under the Clean Air Act.

As a result, while Ethylene Oxide production rates remained stable, its consumption decreased in the downstream industries for durable and perishable goods during Quarter 3 of 2022, as per the EIA data. Additionally, high energy costs and weak market sentiment pressured global petrochemical markets during quarter 3 of 2022, and global demand for Lyondellbasell’s products softened.

LyondellBasell is a key petrochemical producer in Bayport, Texas, which went under an unplanned shutdown. It has reduced its operating rates amid the weaker demand sentiments from downstream processors and contributed to the margin compression.

ChemAnalyst anticipations that the downstream industries will further cut the use of Ethylene Oxide and opt for alternative production options, which will negatively affect the US Ethylene Oxide market in the upcoming weeks.