1. Today's Summary

1. 9/10: There are no signs of de-escalation in the US-Iran conflict, and the Houthis continue to exert pressure on Saudi Arabia. Supply risks keep mounting, and international oil prices continued to rise. The NYMEX crude oil futures October contract rose by USD 6.43 to USD 102.48/bbl, up 6.69% from the previous period; the ICE Brent November contract rose by USD 6.42 to USD 107.63/bbl, up 6.34%. China's INE crude oil futures 2610 contract rose by 45.9 to RMB 768.4/bbl, and gained 47.6 to RMB 816/bbl in night trading.

2. 9/10: The port ethylene CFR Northeast Asia USD quote stood at USD 1,150/tonne, flat versus the previous working day.

2. Spot Market Overview

Table 1 Domestic Ethylene Oxide Price Summary (Unit: RMB/tonne)

Ethylene oxide market prices were raised today. On the supply side, ethylene glycol prices remain at high levels, and co-production units still prefer to produce ethylene glycol, leaving spot ethylene oxide supply in the market still tight; on the demand side, downstream industries maintained steady consumption; on the cost side, spot ethylene availability in East China is unusually tight, and mainstream producers are quoting on the high side. Derivatives producers and traders showed willingness to buy on rigid demand, and high-priced deals were concluded in volume today. Overall, supply and costs are providing support to the market in the short term, and ethylene oxide prices are expected to run high. Going forward, close attention should be paid to adjustments in upstream and downstream supply and demand.

3. Production Dynamics

Today, China's ethylene oxide industry capacity utilization rate stood at 51.53%; as of the previous working day, the theoretical profit of ethylene oxide based on purchased imported ethylene was RMB 1,231.57/tonne, up from the previous period as ethylene oxide prices rose; today's theoretical profit for ethylene oxide based on purchased domestic ethylene was RMB 887.5/tonne, an increase of RMB 375/tonne from the previous period, mainly due to higher ethylene oxide prices.

4. Price Forecast

Ethylene oxide prices are expected to remain firm at high levels. On the supply side, ethylene glycol prices may run high, co-production units tend to favor ethylene glycol production, and the spot supply shortage in the ethylene oxide market has yet to ease; downstream key industries are performing reasonably well and consuming steadily; on the cost side, mainstream plants are currently shipping mainly through pre-sales, rigid-demand buying sentiment in the market is fair, prices may extend their rise, and the cost side may offer some support. Overall, supply and costs provide support in the short term, prices may stay high, and subsequent upstream and downstream developments warrant close attention.

5. Related Products

① Ethylene (feedstock): Domestic market ethylene spot available for sale is limited, and most producers release ethylene mainly through pre-sales. However, a slight pullback in crude oil prices weighed on market buying sentiment, and trading activity was average. Ethylene prices are expected to be largely range-bound in a stalemate on the next working day, with the possibility of a narrow softening in isolated high quotes; mainstream East China ethylene discussions are expected around RMB 9,200-9,400/tonne, while Shandong mainstream discussions are at RMB 9,000/tonne. In USD terms, the shipping market remains in a tight supply-demand balance, with prices likely to range around USD 1,100-1,200/tonne.

② Polycarboxylate water-reducer monomer (main downstream): Domestic polycarboxylate water-reducer monomer is likely to run firm; the main raw material, ethylene oxide, may hold firm at high levels, and the tight spot supply in the market persists; ethylene glycol prices are running firm, and downstream industries are adjusting operating rates within a narrow range and purchasing on rigid demand; ethylene market supply remains tight, but buying interest at current prices is limited, so prices are expected to be largely range-bound in a stalemate. Monomer spot liquidity remains tight, downstream purchasing is still predominantly for rigid demand, downstream players are cautious about rapid price increases, deals are negotiated on a volume basis, and short-term prices may run firm. In summary, the price of EPEG in the main East China market is expected to reach RMB 10,900-11,100/tonne on the next working day.

③ Ethylene glycol (related product): With geopolitical developments shifting, news of negotiations concerning the Strait of Hormuz has exerted bearish pressure on chemical commodities, but the tight supply situation in ethylene glycol is unlikely to ease in the short term, limiting the market's downside. Mainstream market prices are expected in the RMB 6,700-6,800 range next week.

6. Data Calendar

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

Note: 1. ↓↑ denotes large fluctuations, highlighting data dimensions with a change of more than 3%. 2. ↗↘ denotes narrow fluctuations, highlighting data with a change within 0-3%.