The global ethylene oxide (EO) market exhibited varied activity in mid-October. In Shanghai, prices decreased -2.3% as supplies rose from BASF鈥檚 Zhanjiang steam cracker together with strong domestic cracker rates, providing increased availability, all while downstream demand remained steady. Polyester fibre plants were operating in the 83-85% range and polyether polyol offtake was average, limiting sellers' ability to raise offers. In the U.S. Gulf, Ethylene oxide fell -1.6% as feedstock flows continued and plants were fully operational, with no reported major outages. High operating rates and weakening North American ethylene prices and related dark demand from packaging, automotive, and construction sectors contributed to declining prices. Seasonal antifreeze blending offered limited assistance. In contrast, Hamburg is stable reflective of balanced supply and steady buying interest, which is not happening elsewhere. Overall, markets are under supply-driven pressure, and softening could happen in the short term in Asia and the U.S. markets while Europe is relatively stable.
The global ethylene oxide market experienced a mixed performance in the third week of October, with Asian and U.S. markets facing weaker price pressure while Europe exhibited a neutral tone.
Ethylene oxide prices in Shanghai decreased to 2.3% week-on-week, reflecting the rising supply amid soft downstream demand. With the start-up of BASF's Zhanjiang steam cracker with a 1,000,000 t/y ethylene train, there were new ethylene volumes assigned to the additional ethylene oxide units that created a significant boost to supply. Coupled with strong run rates at domestic naphtha, coal-to-olefins, and ethane crackers - domestic producers were running at a reported operating rate of 97% and coastal inventories were stable providing enough merchant flows. However, ethylene oxide demand from downstream was soft; polyester fibre plants were reported to be operating at 83-85% capacity, and polyether polyol sales were reported to be just moderate. The cost pressures were muted with electricity, steam, and natural gas tariffs remaining unchanged, and the sellers had limited means to increase offers creating a bias towards soft markets. Analysts are forecasting even more softening of ethylene oxide market in the coming week with the new volumes from BASF becoming available with still lacklustre downstream demand.
At the same time, the U.S. Gulf ethylene oxide market also felt pressure, sliding down to 1.62% from the prior week. Market headwinds were driven by the surplus of feedstock and full operational capacity in the Texas Gulf Coast plants. There were no reported turnarounds, natural-gas liquids curtailments, or catalyst shortages, and the electricity and steam supply across ERCOT was at level that allowed plants to operate at high run rates. Falling North American ethylene prices, and weak demand from downstream derivatives in the packaging, automotive, and construction sectors contributed to buying pull easing too. Some supportive aspects continued as there remained PET bottle orders, polyester fibre orders, and ethanolamine and surfactant business. Seasonal Q4 antifreeze formulation offered similar support to derivative producers maintaining 4鈥�6-week ethylene oxide inventories. In any case, it remained that high operating rates and low levels of consumption of ethylene oxide from derivatives still point to an ongoing opportunity for domestic values to soften, with seasonal coolant blending only supporting limited demand.
In contrast, ethylene oxide prices in Hamburg experienced stability with no week-on-week price changes. Market neutrality reflected consistent production levels with balanced buy interest that allowed some relief from the downward price movements in neighbouring regions. Also, European ethylene oxide providers and buyers seemed to be comfortable in holding current price levels while the broader sentiment turned bearish globally.
Looking ahead, Global ethylene oxide markets are anticipated to continue feeling downward pressure from higher Asian and U.S. production against muted downstream demand. Prices are expected to soften even further in the short term, although seasonal end-use demand (i.e., antifreeze blending in North America) may be able to offer temporary support against the ethylene oxide market-wide bearish condition.
