For the Quarter Ending December 2022
North America
The Ethylene Oxide price trend showcased mixed sentiments during the final quarter of 2022. Initially, the prices decreased as USA’s EPA identified risks from commercial sterilization facilities using Ethylene oxide, which negatively impacted the product demand and consumption levels in the downstream industries. In the mid-quarter, the trend shifted, and prices rose due to a rise in production costs amid high feedstock Ethylene demand from Polyethylene producers. In the final month of the quarter, prices again declined due to a reduction in the upstream WTI Crude oil and natural gas prices due to a decline in demand from Chinese importers amid the rise in the covid cases. At the end of Q4 2022, Ethylene Oxide prices in the USA hovered at USD 730/MT.
Asia
Ethylene Oxide prices showcased mixed sentiments in the Asian region during the Quarter IV of 2022. During the first month of the quarter, prices remained stable and rose marginally due to decreased feedstock Ethylene availability in countries like Japan because of plant shutdowns and rising inflation. In the mid-quarter, feedstock plants like Idemitsu Kosan, with a capacity of 6,90,000/MT, restarted, and feedstock availability improved due to this production cost of EtO decreased. Towards the end of the quarter, prices decreased in Asia amid destocking practices by producers. While in China, prices were stable and inclined slightly due to currency depreciation because of the economic slowdown. At the end of Q4 2022, Ethylene Oxide prices in China and Japan hovered at USD 975/MT and USD 1030/MT, respectively.
Europe
In the European region, Ethylene Oxide prices oscillated during Q4. Initially, prices plunged amid the decline in consumption and firm production rates due to the surplus availability of feedstock Ethylene supplies and the consequent reduction in production costs of EtO. However, during the mid-quarter, prices inclined upward due to increased upstream Naphtha and Dutch TTF natural gas prices. Towards the end of the quarter, EtO prices plunged noticeably on the back of weak offtakes and a decrease in the feedstock and production costs amid a reduction in the input costs. At the end of Q4 2022, Ethylene Oxide prices in Germany settled at USD 895/MT. Meanwhile, the sharp drop in freight charges resulted in increased Asian EO imports to European shores.
For the Quarter Ending September 2022
North America
In the Q3 of 2022, Ethylene Oxide prices declined in the USA on the back of stable demand sentiments by the downstream processors. In the first half of the quarter, prices decreased sharply due to the issued embargo on its transportation through rail, increasing domestic inventory levels. While in the second half of Q3 2022, producers like LyondellBasell went under unplanned shutdown and inventory levels remained under stress. At the same time, EPA revised its EtO emissions regulations which negatively impacted the demand from importers. Subsequently, after a plunge of almost 23% against the previous quarter's prices, Ethylene Oxide in the USA settled at USD 1205/MT.
Asia
Like the previous quarter, Ethylene Oxide prices continued to decline in H1 of Q3 in the Asian countries on the back of average orders from the downstream industries. In August, Shenhua Xinjiang in China went under maintenance turnaround, due to which domestic inventory levels decreased due to moderate demand from downstream glycol producers. Consequently, the price trend revived in the final month of Q3 in China and Japan but remained the same in India as the previous one. At the end of the quarter, Ethylene Oxide China's discussions settled at USD 1060/MT, after an average decrease of 17.2% in the previous quarter's prices.
Europe
Ethylene Oxide prices decreased throughout quarter III of 2022. Initially, sluggish demand and weak feedstock costs reduced the product prices in the region. Key producer LyondellBasell, with a capacity of 3.56 MTPA, went under planned shutdown in August amid high energy prices and rationing of input supplies which affected the domestic inventory levels. However, the product prices decreased noticeably in the H2 of the quarter due to a significant plunge in feedstock costs and simultaneous revised regulation by the EU commission on Ethylene oxide presence in food derivatives. After witnessing a decrease of 13.5% in the previous quarter's prices, Ethylene Oxide discussions in Germany settled at USD 1285/MT at the end of Q3, 2022.
In the second quarter of 2022, Ethylene Oxide witnessed mixed sentiments throughout the quarter. The uncertainty in the crude oil prices affects the region's Ethylene Oxide and other petrochemical commodities. Due to the conflicts between Russia and Ukraine, the US imposed sanctions on Russia have supported the inquiries for WTI Crude from several Northeast Asian regions. The higher freight charges and delayed deliveries had levied impact on the complete value chain. At the end of the quarter, the price of Ethylene Oxide decreased, and the cost pressure from Ethylene weakened and supported the downstream industries.
The Asia Pacific market showed a rise and fall in prices of Ethylene Oxide throughout the second quarter. The fluctuations in international crude oil prices, as a resulting increase in Ethylene Oxide at the beginning of the quarter. The upstream cost pressure from Ethylene drives the downstream derivatives in the region. China lifted the area's lockdown and slowly returned to the normal market at the end of the quarter. Overall sentiments in the Asian Ethylene markets remain bearish, with demand curbed by low operating rates and weak regional production margins. Despite the current market uncertainty, OPEC has been unable to close the growing supply-demand gap in crude oil.
Throughout the quarter, the European region's trend of Ethylene Oxide increased. The tight supply of upstream Ethylene and rising crude oil and natural gas prices impacted the entire European market. Russia's special military operations against Ukraine, as well as European countries' retaliation in the form of sanctions against Russian oil and gas imports, had an impact on the international market. Supply chain disruptions caused by raw material shortages have been exacerbated since the sanctions imposed by the western countries.
