Cost Support: Ethylene Oxide Prices Remain Stable

1. Daily Summary

1. Sep 21: Reports indicating a potential resumption of US-Iran negotiations eased market concerns, leading to a decline in international crude oil prices. NYMEX WTI crude oil futures (October contract) closed at $95.78/bbl, down $4.52/bbl (-4.51% WoW); ICE Brent crude oil futures (November contract) closed at $100.34/bbl, down $3.53/bbl (-3.40% WoW). China INE crude oil futures (Nov 2026 contract) fell by 23.6 yuan to 730.8 yuan/bbl; the night session dropped another 16.5 yuan to 714.3 yuan/bbl.

2. Sep 21: Portside ethylene CFR Northeast Asia USD price stood at $1,180/ton, unchanged from the previous trading day.

2. Spot Market Overview

Table 1: Domestic Ethylene Oxide Price Summary (Unit: Yuan/ton)

Ethylene oxide (EO) prices remained stable. On the supply side, MEG prices softened slightly, but spot supply of EO remained tight, providing support to the market. Downstream purchasing was driven primarily by rigid demand, keeping supply and demand relatively balanced. Regarding costs, ethylene producers faced no immediate pressure to sell externally, with most output allocated to pre-sold orders. However, buying interest for derivatives has been weak recently, with market activity limited to low-price inquiries and negotiations, resulting in a generally quiet trading atmosphere. Overall, short-term fundamentals offer some support, keeping EO prices firm. Future trends will depend on developments in both upstream and downstream sectors.

3. Production Dynamics

Today, the operating rate of China's ethylene oxide industry stood at 49.26%. As of the previous trading day, the theoretical profit for EO produced using imported ethylene was 1,586.3 Yuan/ton. The theoretical profit for EO produced using domestically sourced ethylene today was 1,351 Yuan/ton, remaining unchanged from the previous period.

4. Price Forecast

Ethylene oxide is expected to remain firm at high levels in the short term. On the supply side, inventory availability of related product MEG remains tight. Co-production units are unlikely to change their operations in the short term, limiting any increase in EO spot supply and sustaining the tight supply condition. On the demand side, downstream industries have seen a slowdown in pre-holiday orders, maintaining only rigid consumption. Regarding costs, recent buying sentiment in the ethylene market has been poor, so prices are expected to remain largely stable, though a slight softening in northern regions cannot be ruled out. Cost factors may still provide some support. Overall, supply and cost sides continue to support the market, suggesting EO prices will likely remain stable in the short term. Attention should be paid to subsequent changes in upstream and downstream dynamics.

5. Related Products Update

① Ethylene (Raw Material): Currently, domestic producers' willingness to sell ethylene has increased. Prices of derivatives have mostly declined, leading to weak profitability. Today's market trading atmosphere was average, with external procurement demand failing to boost the market. Ethylene prices are expected to remain steady but slightly weak in the next trading day. Mainstream negotiated prices in East China are around 9,400 Yuan/ton, while Shandong prices have settled between 9,250-9,300 Yuan/ton. In terms of USD pricing, naphtha prices have fallen, and the shipping market remains tight. The USD market is expected to remain firm, with prices likely ranging between $1,150-$1,210/ton.

② Polycarboxylate Superplasticizer Monomer (Key Downstream): Domestic prices for polycarboxylate superplasticizer monomers may see slight fluctuations. The main raw material, ethylene oxide, is expected to remain stable temporarily. There is no significant pressure on EO supply within the plant, and downstream industries across various sectors are maintaining rigid procurement schedules. Recent weakening macroeconomic conditions have negatively impacted market sentiment. Buying interest for ethylene is weak, so its price is likely to continue its steady trend, potentially offering some cost support. High-price transactions for monomers within the market are sporadic; downstream buyers are cautious and waiting on the sidelines, with trades negotiated based on volume. In summary, the mainstream EPEG price in East China is projected to range between 11,800-12,000 Yuan/ton.

③ Monoethylene Glycol (Related Product): Signs of easing geopolitical tensions have led to lower costs for MEG. Supply remains tight in the short term, but expectations of loosening supply in the longer term suggest that strong basis prices may persist. MEG spot prices in East China are predicted to range between 6,900-7,000 Yuan/ton tomorrow.

6. Data Calendar

Table 2: Domestic Ethylene Oxide Data Overview (Unit: 10,000 tons)