US Gulf ethylene oxide (EO) prices exhibited decreasing momentum during August 2025, with a final decline noted as of the last week of August by 2.2%. The Ethylene Oxide prices moved down in part due to a decrease of 5.8% in feedstock ethylene prices, driven primarily by lower value upstream energy costs. Some of the bearish price momentum felt was buffer by overall stable demand from downstream sectors including cleaning, and ethylene glycols. Market conditions were stable with production, and supply chains well managed, and therefore, price stability should be sustained moving into September.
Key Highlights
On the demand side, downstream consumption of Ethylene Oxide derivatives was mostly stagnant through the month of August. Monoethylene Glycol (MEG) demand remained steady, bolstered by steady downstream demand for (PET) packaging and antifreeze applications. Diethylene Glycol (DEG) had steady offtake from resin and ink end-users despite limited activity in that market. PTMEG demand from elastic fibre producers was flat, with no real change in activity. Glycol Ethers, particularly Ethylene Glycol Monobutyl Ether (EGBE) had slight seasonal demand uptick associated with increased demand in the coatings and cleaning sectors, combined with industrial restocking and maintenance cycles last month. This sustained demand from downstream sectors helped to soften the broader cost-driven pull back in Ethylene oxide prices and left the market sentiment with a neutral to slightly bearish tone.
From a supply standpoint, Ethylene Oxide production held relatively stable across U.S. facilities in August. Ethylene oxide producers calibrated their production levels to mirror the domestic market demand, while also benefiting from them steep decreases in feedstock ethylene prices, which aided in relief of production costs and supported competitive FOB prices. Inventory levels of Ethylene oxide were managed very well and ensured consistent availability across critical derivative sectors. With steady manufacturing capability and no major interruptions, it was safe to say the supply-side fundamentals remained firm and supported a well-balanced ethylene oxide market through the month.
Diving deep into ChemAnalyst’s Quantitative Analysis
Ethylene Oxide is frequently 'cyclical' due to seasonal demand, feedstock and operational considerations. While upstream naphtha prices are expected to remain steady, occasional rises due to crude oil tightening ahead of winter may elevate production costs. Seasonal demand for Ethylene oxide from packaging sector and ethylene glycols used to make antifreeze in automotive sector typically supports consumption mid-year, though a post-peak slowdown is anticipated.
What does the current market indicates?
The U.S. Ethylene Oxide market represents a cost-led correction, as opposed to a structural failure. Prices fell throughout August, following rapid declines in feedstock ethylene costs driven by lower upstream prices in crude oil. Despite the muted price experience, market fundamentals stayed balanced as there was no substantial supply manufacturing interruption. Downstream demand showed mixed sentiment, MEG and PTMEG saw slight softness while DEG and glycol ethers continued stable to steady consumption, although this did not overall offset the larger pressures on price. Generally, the sentiment in the market is balanced, with the potential for Ethylene oxide price softening to continue if feedstock costs remain low.
