EO prices remain stable

1. Today's Summary

1. Oct 7: Communication channels between the US and Iran remained open, combined with the possibility of further Fed rate hikes, leading to a decline in international crude oil prices. NYMEX WTI November futures closed at $88.28/bbl, down $1.16 (-1.30% WoW); ICE Brent December futures closed at $100.20/bbl, down $0.38 (-0.38% WoW). China INE crude oil futures were suspended due to the National Day holiday.

2. Oct 7: Port ethylene USD CFR Northeast Asia price was $1,150/ton, unchanged from the previous working day.

2. Spot Market Overview

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

Ethylene oxide (EO) prices remained stable today. On the supply side, as monoethylene glycol (MEG) prices recovered, co-production units increased their motivation to produce MEG, resulting in no significant increase in EO supply. The main downstream industries primarily operate on contract basis, with market transactions driven by rigid demand. On the cost side, domestic ethylene prices softened slightly, making it difficult to boost market demand. Overall, fundamentals showed no obvious fluctuations, keeping EO prices stable. Continuous attention should be paid to upstream and downstream dynamics.

3. Production Dynamics

Today, the capacity utilization rate of the Chinese EO industry stood at 52.01%. As of the last working day, the theoretical profit for EO produced using imported ethylene was 1,712.51 CNY/ton; the theoretical profit for EO produced using domestically sourced ethylene was 1,406.25 CNY/ton, unchanged from the previous period.

4. Price Forecast

EO prices are likely to maintain a temporarily stable trend. On the supply side, rising MEG prices have enhanced the incentive for co-production units to shift output towards MEG, resulting in no obvious increase in EO supply and tight local availability. On the demand side, major downstream industries have limited absorption capacity for EO, mainly adhering to rigid demand, with strong wait-and-see sentiment prevailing after the holiday. On the cost side, domestic ethylene prices have retreated, with the market focusing on pre-sales. Derivative enterprises stocked up during the holiday, limiting new transaction volumes. Overall, supply-side support remains, suggesting EO prices will likely remain temporarily stable in the short term. Further monitoring of upstream and downstream changes is required.

5. Related Product Status

① Ethylene (Raw Material): Currently, spot ethylene availability from domestic producers is limited, with sales mostly based on pre-orders. Profitability in styrene-based derivative markets is weak, failing to stimulate external procurement demand. Ethylene prices are expected to remain steady but slightly weak in the next working day, with mainstream negotiation prices in East China ranging from 8,900–9,100 CNY/ton. Regarding USD pricing, although the repair of long-distance crude oil pipelines is faster than expected, the shipping market maintains a tight supply-demand balance, with prices likely fluctuating around $1,140–$1,180/ton.

② Polycarboxylate Superplasticizer Monomer (Key Downstream): Domestic polycarboxylate superplasticizer monomer prices may adjust narrowly downwards. The key raw material, EO, is expected to remain stable while awaiting market direction. Spot supply resources may increase somewhat, while downstream industries continue to purchase based on rigid demand. Available ethylene inventory has risen, prompting producers to offer discounts to clear stock, creating potential for narrow price declines, though cost-side support is limited. Low-priced monomer inventory within plants has increased, with traders holding bearish sentiments. Downstream purchasing sentiment is cautious, market activity is sluggish, and transactions are negotiated based on volume. In summary, the mainstream EPEG price in East China is predicted to range from 10,300–10,600 CNY/ton.

③ Monoethylene Glycol (Related Product): Geopolitical shifts have led to a general rise in chemical commodities, boosting bullish confidence. However, given the significant premium in MEG and increased factory operating rates, expectations of ample future supply pose a bearish impact on the market. The market is expected to remain in a downward trend in the short term. Tomorrow's reference price for spot self-pickup in East China is estimated at 6,200–6,300 CNY/ton.

6. Data Calendar

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

Note:

1. ↓↑ indicates significant volatility, highlighting data dimensions with changes exceeding 3%.
2. ↗↘ indicates narrow-range volatility, highlighting data dimensions with changes within 0-3%.