For the Quarter Ending September 2024
North America
The third quarter of 2024 for Ethylene Oxide in North America has been characterized by significant price increases driven by a variety of factors. Tight supply situations, influenced by low production rates and maintenance shutdowns across the region, have led to a bullish market sentiment.
In the USA specifically, Ethylene Oxide prices have seen the most notable changes, with prices steadily rising. Market participants have reported increased feedstock Ethylene prices, contributing to elevated production costs and subsequently pushing Ethylene Oxide prices upwards. Demand from downstream industries has been stable to moderate, with inquiries from Latin America and Mexico boosting export prices. Additionally, disruptions caused by Hurricane Francine and maintenance shutdowns at key plants have further tightened supply, leading to price hikes.
Comparing to the same quarter last year, Ethylene Oxide prices have seen a significant 14% increase. Moreover, the quarter-on-quarter change in 2024 recorded a 11% increase, indicating a consistent upward trend. The second half of the quarter saw a 4% price increase compared to the first half. The quarter-ending price stood at USD 1493/MT of Ethylene Oxide Contract FOB US Gulf in the USA, reflecting a positive and increasing pricing environment.
APAC
Throughout Q3 2024, the Ethylene Oxide market in the APAC region has experienced increasing prices, driven by a combination of factors. The quarter has been characterized by stable demand from downstream industries, particularly in the Monoethylene Glycol and Ethoxylates sectors. This steady demand, coupled with tight supply conditions, has led to a bullish pricing environment. Additionally, rising feedstock Ethylene prices have contributed to the overall upward trend in Ethylene Oxide prices. In Japan, the market has seen the most significant price changes, with prices ending the quarter at USD 919/MT of Ethylene Oxide Ex-Osaka. The quarter saw a 3% price increase from the first half to the second half, highlighting a strengthening pricing trend. Despite a -4% decrease from the same quarter last year, the quarter-on-quarter change recorded a 2% increase, indicating a more positive pricing environment in the current quarter. Overall, the Japanese market has exhibited a consistent increase in prices, reflecting a positive sentiment in the pricing environment.
Europe
In Q3 2024, the Europe region experienced a significant increase in Ethylene Oxide prices, driven by multiple factors. Tight supply chains, influenced by low operating rates and disruptions at key production facilities, contributed to the price surge. Additionally, rising feedstock Ethylene costs and geopolitical tensions in the Middle East, impacting oil prices, further propelled the upward pricing trend. Netherlands, in particular, witnessed the most substantial price changes during the quarter. The overall trend in pricing showed a consistent increase, with seasonality and correlation playing a significant role in price fluctuations. Compared to the same quarter last year, prices were down by 5%, reflecting the recent surge. Furthermore, a 1% decrease from the previous quarter in 2024 was followed by a notable 4% increase between the first and second half of the quarter. The quarter-ending price of USD 1428/MT for Ethylene Oxide FD Rotterdam in Netherlands marked the culmination of this positive pricing environment, highlighting the ongoing upward trajectory in prices.
MEA
In Q3 2024, the Ethylene Oxide market in the MEA region experienced declining prices, influenced by several key factors. The market was characterized by a lower pricing environment, with minimal fluctuations observed. Factors such as weak demand from downstream industries, adequate supply levels, and moderate Ethylene Oxide feedstock prices contributed to the overall decline in prices. In Saudi Arabia, which saw the most significant price changes, the market trend mirrored that of the broader region. The percentage change from the same quarter last year stood at -1%, indicating a slight decrease in prices over the year. Moreover, the quarter-on-quarter change of -3% highlighted a marginal decline in prices from the previous quarter in 2024. Interestingly, the comparison between the first and second half of the quarter showed no significant price variation, underscoring the consistent pricing trend observed. The quarter-ending price for Ethylene Oxide USD 1243 per MT FOB Al Jubail in Saudi Arabia, reflecting the prevailing pessimistic sentiment in the market.
For the Quarter Ending June 2024
North America
Overall, prices of Ethylene oxide have witnessed an uptrend across the US market during the second quarter of 2024 on the back of steady downstream demand and tight supply. The inquiries from the downstream Monoethylene Glycol and Ethoxylates industry have been moderate in the domestic market.
Most market transactions were also mainly based on a need-on-demand basis. On the macroeconomic front, the annual inflation in the US slowed to 3.3% in May 2024, below 3.4% in April but still above the hope of the Federal Reserve which is 2%. In the meantime, inquiries from the overseas market have also been steady.
The feedstock Ethylene prices have increased which resulted in the high production cost of Ethylene oxide in the domestic market. On the other hand, the material availability was limited amid force majeure by the major manufacturer of Ethylene oxide Dow Chemical Company, Plaquemine, Louisiana in the backdrop of a series of explosions and fires that resulted in the involuntary unplanned shutdown. Although earlier it was expected that the plant might restart in early Q2, now there is an expectation that the plant might restart towards the end of Q2 of 2024. Consequently, prices of Ethylene oxide FOB US Gulf were settled at USD 1390/MT with a month-on-month increment of 3.0% during June 2024.
Asia- Pacific
Ethylene oxide prices have inched lower across the Japanese market during the second quarter of 2024 in the wake of excessive supply and thin derivative demand. The cost support from feedstock Ethylene was limited to Ethylene oxide as its prices settled on the lower end throughout the quarter, contributing to a downward shift in the price realization of Ethylene oxide in the domestic market. On the other side, the inquiries for Ethylene oxide from the downstream Mono ethylene Glycol and Ethoxylates industry have been largely fragile with buyer appetite remaining tepid, with broader macroeconomic pressure continuing to limit the need for material from derivative sectors. Also, low demand from the end-user sector remained pressuring the domestic Ethylene oxide markets, with buyers maintaining a hand-to-mouth approach. On the other hand, manufacturers of Ethylene oxide have been operating at low rates to cope with weak margins caused by oversupply and low demand growth. Overall, the availability of Ethylene oxide was abundant which weighed down the prices of Ethylene oxide in the domestic market. Therefore, prices of Ethylene oxide Ex- Osaka were settled at USD 865/MT during June 2024.
Europe
Ethylene oxide prices have showcased a bearish rally across the European market during the second quarter of 2024 amid quiet trading activity, with buyers reluctant to commit to transactions. The feedstock Ethylene prices have decreased amid weak demand from other industries which in turn resulted in the low production cost of Ethylene oxide in the domestic market, leading to the downward shift in the price realization of Ethylene oxide in the domestic market.
In addition, the demand for Ethylene oxide from the downstream Monoethylene Glycol and Ethoxylates industries has remained consistently subdued, with market players gearing for the summer downturn amid seasonal holidays. The spot market transactions were also muted, with buyers remaining on the sideline. In the broader economic context, German inflation fell more than expected in June, resuming its downward trend after two consecutive months of increases, and leaving the door open for another rate cut by the European Central Bank in September. Also, the decline in the inflation rate would not affect Ethylene oxide demand within the downstream industry in the short term.
Moreover, the manufacturing firms were still operating at reduced rates to balance out underperforming downstream demand. Despite this, the material availability was sufficient to cater to current downstream demand as new orders declined, which weighed down the prices of Ethylene oxide. Thus, prices of Ethylene oxide FD Hamburg were settled at USD 1343/MT during June 2024.
Middle-East
Throughout the second quarter of 2024, Ethylene oxide prices have continued to decline in the Saudi Arabian market as concern over reduced downstream demand remained intact throughout the quarter, as buyers complained about the unsatisfactory outlook for end-product demand. Hence purchases remain tied to basic only needs. The feedstock Ethylene prices have persistently declined amid adequate inventories and limited demand which resulted in the low production cost of Ethylene oxide in the domestic market, contributing to a downward shift in the price realization of Ethylene oxide in the domestic market. On the demand front, the inquiries from the downstream Monoethylene Glycol and Ethoxylates industry were tepid as consumption from the end-user sector has declined which weighed down the prices of Ethylene oxide in the domestic market. The spot market transactions were also average as terminal firms showed less enthusiasm. Also, downstream production margins remained weak, with buyers citing poor profitability on key derivatives such as Monoethylene Glycol and Ethoxylates. Moreover, Saudi Arabia's annual inflation rate held at 1.6% in April, underpinned once again by an increase in housing rents. Meanwhile, demand from the overseas markets has also softened with expectations that it may not recover soon amid external challenges. The supply of Ethylene oxide was abundant amid a decline in new orders to meet the overall downstream demand which further deteriorated the prices of Ethylene oxide in the domestic market. Therefore, prices of Ethylene oxide FOB AL Jubail were settled at USD 1282/MT during June.
For the Quarter Ending March 2024
North America
Ethylene oxide prices have witnessed mixed sentiments across the US market during the first quarter of 2024. During the initial Q1 of 2024, Ethylene oxide prices have declined in the domestic market. The feedstock Ethylene prices have decreased which resulted in the low production cost of Ethylene oxide in the domestic market.
These lead to the bearish market sentiments of Ethylene oxide among the manufacturers. In addition, demand for Ethylene oxide from the downstream Monoethylene Glycol and Ethoxylates industry was sluggish from both the domestic and international market which weighed down the prices of Ethylene oxide in the domestic market. However, towards the end of Q1 2024, Ethylene oxide prices strengthened in the domestic market as manufacturers faced a winter storm, which caused several petrochemical units to shut down operations or lower operating rates in the domestic market.
Moreover, Indorama Ventures Public Company Limited Clear Lake, Texas, and the Dow Chemical Company Seadrift, Texas in the US have shut down their Ethylene plant ahead of subfreezing weather conditions which led to supply shortage in the domestic market. Moreover, on the demand front inquiries from the downstream MEG and Ethoxylates industry remained steady in the domestic market. As a result, prices of Ethylene oxide FOB US Gulf were settled at USD 1354/MT during March 2024.
Asia- Pacific
Throughout the first quarter of Q1 of 2024, Ethylene oxide prices in the Japanese market surged due to rising upstream costs and limited domestic supply. The strong pricing of its feedstock, Ethylene, pushed Ethylene oxide prices higher domestically, fostering positive sentiment among manufacturers. In addition, Crude oil prices remained above $80 per barrel throughout February, signalling market tightening amid ongoing OPEC+ production cuts and disruptions in shipping routes such as the Red Sea and Suez Canal. Moreover, during the holiday season, downstream factory production varied, with some focusing on depleting inventory, thereby increasing demand for Ethylene oxide within the domestic market. Furthermore, disruptions in the Red Sea led to elevated freight rates. Conversely, manufacturing firms operated at reduced capacities due to decreased downstream demand, resulting in constrained material availability domestically. Overall, the demand for Ethylene oxide from the downstream Monoethylene Glycol and Ethoxylates industry was moderate in the domestic market. As a result, Ethylene oxide prices settled at USD 936/MT in March 2024 on an Ex- Osaka basis.
Europe
Ethylene oxide prices have continued to show an upward trend across the German market during the first quarter of 2024 on the back of high upstream costs and tight supply. The cost support from feedstock Ethylene prices was sufficient on Ethylene oxide as its prices settled on the higher end in the domestic market. Furthermore, crude oil prices have been strengthening over the past few quarters following a string of drone attacks by Ukraine on Russian refineries, sparking concern about fuel supply security. The rise in crude oil prices has further raised the overall production cost of Ethylene oxide in the domestic market. In addition, reduced domestic production in response to a decline in downstream demand, leading to the limited availability of finished stock of Ethylene oxide in the domestic market. However, demand for Ethylene oxide from the downstream Ethoxylates and Glycol derivatives industry has persistently dropped amid macroeconomic headwinds. Nonetheless, it had a limited bearing on the prices of Ethylene oxide. The spot market transactions were also average in the domestic market. As a result, prices of Ethylene oxide FD Hamburg were settled at USD 1464/MT during March 2024.
Middle- East
Ethylene oxide prices have been marching higher in the Saudi Arabian market throughout the first quarter of 2024. The feedstock Ethylene prices have increased followed by strong crude oil prices which resulted in the high production cost of Ethylene oxide, supporting the prices to follow an uptrend in the domestic market. In addition, global crude oil prices were extending gains, with crude hitting past the USD 91/barrel mark, fuelled by escalating geopolitical tension in the Middle East which could disrupt supply amid output cuts by OPEC and its allies. The strong crude oil prices have further raised the overall production cost of Ethylene oxide in the domestic market. However, the inquiries from the downstream Monoethylene Glycol industry remained tepid in the domestic market. Nonetheless, it had a limited bearing on the prices of Ethylene oxide. In the meantime, purchasing activity from the overseas market has also diminished amid unfavourable economic conditions. On the other side, the participants failed to see a significant improvement in downstream demand during March, which is expected to last during the upcoming term with the impact of the nearing Eid al-Fitr holiday. The material availability was limited to meet the downstream demand, contributing to the upward shift in the price realization of Ethylene oxide. As a ripple effect, prices of Ethylene oxide FOB AL Jubail were settled at USD 1359/MT during March 2024.
For the Quarter Ending December 2023
North America
Ethylene oxide prices have experienced a mixed bag across the US market during the fourth quarter of 2023. During October 2023, Ethylene oxide has increased significantly due to limited material availability in the domestic market. The cost support from feedstock Ethylene was sufficient as its prices settled on the higher side in the domestic market. However, demand from the downstream Ethoxylates and Monoethylene Glycol industry has moderate in the domestic market. In addition, the Ethylene oxide availability continues to be tight as Dow’s Plaquemine, plant remains down until Q2 2024 which promoted the manufacturers to raise their quotation.
However, during November and December, Ethylene oxide prices have inched lower in the domestic market. The feedstock Ethylene prices have decreased amid weak demand from other industries which in turn led to the low production cost of Ethylene oxide. In addition, demand for Ethylene oxide from the downstream Ethoxylates and Monoethylene Glycol industry has remained tepid amid the off-seasonal dullness along with macro-economic headwinds including high inflationary pressure and rising interest rates, leading the bearish market sentiments of Ethylene oxide among the manufactures. In addition, spot market transactions were also average as the enthusiasm of terminal firms to enter the market was not strong.
In addition, the supply of Ethylene oxide was limited influenced by an outage at Dow Plaquemine which has been down since an explosion occurred in mid-July, but it had limited bearing over the prices of Ethylene oxide. In addition, LyondellBasell Industries in Bayport Texas has permanently shut down its Ethylene oxide production as Ineos Oxide purchased LyondellBasell's Ethylene oxide and derivative production facility in Bayport underwood Texas, for $ 700 million. Thus, as a result, Ethylene oxide prices spot FOB US Gulf were settled at USD 1332/MT during December 2023.
Asia-Pacific
Ethylene oxide prices have witnessed mixed sentiments across the Asian market during the fourth quarter of 2023. During the initial of Q4 of 2023, Ethylene oxide prices have increased across the Japanese market. The cost pressure from feedstock Ethylene was sufficient on Ethylene oxide prices as its prices settled on the higher side in the domestic market. These lead to the bullish market sentiments of Ethylene oxide among the manufacturers. In addition, demand for Ethylene oxide from the downstream Monoethylene Glycol and Ethoxylates industry has moderate in the domestic market. However, towards the end of the quarter of 2023, Ethylene oxide prices have inched lower in the domestic market. The demand from the downstream Ethoxylates and Monoethylene Glycol industry has tepid amid macro-economic headwinds and low seasonality in the domestic market. The spot market transactions were also average. In addition, market participants reported that the lack of demand kept exerting pressure on the seller’s side as buyers either made limited purchases when necessary or stayed in a wait-and-see stance in anticipation of additional drops. Furthermore, the feedstock Ethylene prices have dropped which resulted in the low production cost of Ethylene oxide in the domestic market. In addition, Japan’s manufacturing activity declined in November, highlighting the fragility of the economy amid weak demand and inflation. On the supply side, the material availability was high, putting pressure on the manufacturers to clear their inventories at low prices. Therefore, prices of Ethylene oxide Ex- Osaka were settled at USD 940/MT during December 2023.
Europe
Ethylene oxide prices have showcased mixed bags in the European market during the fourth quarter of 2023. During October 2023, Ethylene oxide prices have significantly increased in the German market due to inadequate material availability in the domestic market. The feedstock Ethylene prices have increased amid tight supply which in turn led to the high production cost of Ethylene oxide in the domestic market. The rise in the production cost has supported the prices to follow an upward trend across the domestic market. However, during November and December 2023, Ethylene oxide have decreased in the domestic market. The demand for Ethylene oxide from the downstream Monoethylene Glycol and Ethoxylates industry have remained lukewarm due to macroeconomic headwinds including persistent inflationary pressure and high interest rates coupled with low seasonality which weighed down the prices of Ethylene oxide across the domestic market. Furthermore, BASF mapped out further cost cuts and scaled back investment spending; earnings and sales were at the lower end of its target ranges due to an uncertain global outlook. In addition, cost pressure from feedstock Ethylene was limited on the Ethylene oxide which further decreased the prices of Ethylene oxide. Furthermore, amid the destocking season manufacturers have cleared out their inventories at low prices. As a result, prices of Ethylene oxide FD Hamburg were settled at USD 1473/MT during December.
Middle East
Throughout the fourth quarter of 2023, Ethylene oxide prices have witnessed fluctuating trend across the Saudi Arabian market. During the initial of Q4 2023, Ethylene oxide prices have gained an upward trend in the domestic market. The increase in the prices was majorly attributed to the elevated feedstock Ethylene prices which in turn led to high production cost of Ethylene oxide. The demand from the downstream Monoethylene Glycol and Ethoxylates industry has increased from both the domestic and international market which promoted the manufacturers to raise their offers. However, towards the end of Q4, Ethylene oxide has surprisingly decreased in the domestic market. In the midst of off-season dullness and tepidness in the global economy, the demand for Ethylene oxide from the domestic and international market has been underwhelming and thus, the pace of inquiries from the downstream Ethoxylates and Monoethylene Glycol industry has remained tepid due to slow consumption from the end-user sector, leading the bearish market sentiments of Ethylene oxide among the manufacturers. Additionally, the feedstock Ethylene prices have decreased followed by low Naphtha prices which led to the low production cost of Ethylene oxide across the domestic market. Despite the turmoil in the Red Sea, upstream Crude oil prices have also dropped due to weak demand concerns and sufficient storage. The decline in Crude oil prices has further eased the overall manufacturing cost of Ethylene oxide across the domestic market. Furthermore, it is anticipated that prevailing bearish sentiment is likely to extend into the new year amidst tepid demand. Buyers are waiting for more clarity amid the ongoing war and growing economic problems. As a result, prices of Ethylene oxide FOB Al Jubail were settled at USD 1275/MT during December 2023.
