Ethylene oxide prices remain at elevated levels

1. Daily Summary

1. Oct 9: International crude oil prices fell as the US-Iran negotiation channel maintained communication, coupled with the possibility of further Federal Reserve rate hikes. NYMEX November crude oil futures closed at $88.28/bbl, down $1.16/bbl (-1.30% WoW); ICE December Brent crude futures closed at $100.20/bbl, down $0.38/bbl (-0.38% WoW). China INE crude oil futures were closed for the National Day holiday. Later in the day, international crude oil prices rose due to continued instability in the Middle East and hurricane-induced shutdowns of some offshore US wells. NYMEX November crude oil futures rose to $91.49/bbl, up $3.21/bbl (+3.64% WoW); ICE December Brent crude futures rose to $104.28/bbl, up $4.08/bbl (+4.07% WoW). China INE November crude oil futures (contract 2611) rose by CNY 41.3 to CNY 737.4/bbl in the day session, then dropped by CNY 4.6 to CNY 732.8/bbl in the night session.

2. Oct 9: The CFR Northeast Asia ethylene spot price was USD 1,130/ton, down from the previous business 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, falling monoethylene glycol (MEG) prices have reduced the incentive for integrated plants to produce MEG. Plants currently under maintenance have not yet restarted, resulting in no new supply entering the market. Main downstream industries are purchasing based on rigid demand, leading to a cautious wait-and-see sentiment. On the cost side, domestic ethylene prices have been trading sideways. While downstream derivatives markets show rigid demand, overall transaction volumes remain insufficient. Overall, EO supply provides certain support, keeping prices stable. Continued attention should be paid to upstream and downstream developments.

3. Production Dynamics

Today, the capacity utilization rate of China's ethylene oxide industry stood at 54.05%. As of the last business day, the theoretical profit for EO produced using imported ethylene was CNY 1,887.49/ton. Today's theoretical profit for EO produced using domestically sourced ethylene was CNY 1,687.5/ton, remaining flat week-on-week.

4. Price Forecast

Ethylene oxide prices are expected to remain stable. On the supply side, operating loads of current units are steady with no new supply added. Combined with the delivery of prior contracts, tight supply conditions persist in some regions. On the demand side, downstream industries exhibit strong wait-and-see sentiment, with limited new transactions; main downstream markets continue to purchase based on rigid demand. On the cost side, ethylene prices remain firm with ample supply, while market transactions are concentrated on rigid-demand purchases. Overall, supply-side and cost-side factors provide certain support for EO, suggesting prices will likely maintain their stable trend. Continuous monitoring of upstream and downstream changes is required.

5. Related Products Status

① Ethylene (Raw Material): The ethylene market in East China remains weak, with mainstream transaction prices ranging from CNY 8,800–9,100/ton. Recent shipments in the East China region have been moderate, prompting producers to actively lower quotes to alleviate pressure. Demand from downstream buyers in the region has not shown significant improvement, with some low-price deals primarily flowing to peripheral regions.

② Polycarboxylate Superplasticizer Monomer (Main Downstream): In the next business day, domestic polycarboxylate superplasticizer monomer prices may experience slight fluctuations. The key raw material, ethylene oxide, is expected to remain stable amid a wait-and-see attitude. Supply within the market is increasing slightly, but pressure remains manageable. Various downstream industries face poor order intake, maintaining only rigid consumption. Today, ethylene in the East China market saw lower transaction prices, suggesting a high probability of continued weakness in the short term, offering limited cost support. Low-priced monomer inventory is impacting the market, with most downstream players adopting a wait-and-see approach and focusing on small-scale rigid-demand purchases. Future follow-up demand may be limited, with transactions negotiated based on volume. In summary, EPEG prices in the main East China market are forecasted to range between CNY 9,950–10,250/ton.

③ Monoethylene Glycol (Related Product): Geopolitical uncertainties persist, keeping crude oil prices high. However, MEG supply and demand expectations have weakened, and the short-term adjustment trend is unlikely to change. Tomorrow's ex-tank spot price in East China is estimated to be in the range of CNY 5,650–5,750/ton.

6. Data Calendar

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