Supply support keeps ethylene oxide prices stable

1. Today's Summary

1. Oct 13: Intensified Houthi-Saudi conflict heightened supply risks, while the market assessed expectations of increased Russian supply, resulting in mixed international crude oil prices. NYMEX WTI futures (Nov contract) rose by $0.40/bbl to $94.14/bbl (+0.43% WoW); ICE Brent futures (Dec contract) fell by $0.96/bbl to $105.69/bbl (-0.90% WoW). China INE crude oil futures (2612 contract) rose by 22.5 yuan/barrel to 732 yuan/barrel; the night session gained 8.6 yuan/barrel to reach 740.6 yuan/barrel.

2. Oct 13: Port ethylene USD CFR Northeast Asia price stood at $1,130/ton, unchanged 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, units that underwent maintenance earlier have not yet restarted, resulting in no new supply entering the market. The rise in MEG prices has led co-production units to favor MEG production, keeping overall EO supply tight. New procurement from key downstream industries was limited, and market sentiment remained wait-and-see. On the cost side, domestic ethylene prices were stagnant with weak trading activity, increasing shipping pressure for producers. Overall, supply-side support kept prices firm; continued attention is needed on upstream and downstream dynamics.

3. Production Dynamics

Today, the capacity utilization rate of China's ethylene oxide industry was 54.05%. As of the last business day, the theoretical profit for EO produced using imported ethylene was 1,890.59 CNY/ton. The theoretical profit for EO produced using domestically sourced ethylene was 1,875.00 CNY/ton today, unchanged from the previous period.

4. Price Forecast

Ethylene oxide prices are expected to remain firm at high levels. On the supply side, rebounding MEG prices have shifted co-production units toward MEG, leading to tight supply in some regions with no significant increase in overall market availability. On the demand side, key downstream industries are consuming contract volumes based on rigid demand under cost contracts, and wait-and-see sentiment persists. On the cost side, domestic ethylene prices remain stable with average trading activity, making it difficult to stimulate external procurement demand. Overall, supply and cost factors provide certain support, suggesting EO prices will run firmly at high levels. Continued monitoring of upstream and downstream changes is required.

5. Related Products Status

① Ethylene (Raw Material): Today, East China ethylene prices edged up slightly, with mainstream transaction prices ranging from 8,750 to 8,800 CNY/ton. Supply pressure within the region was low, and willingness to sell at lower prices improved somewhat. Buying interest from derivatives manufacturers and traders was moderate, resulting in good trading activity today.

② Polycarboxylate Superplasticizer Monomer (Key Downstream): Domestic polycarboxylate superplasticizer monomer prices may remain stable or adjust narrowly. The main raw material, ethylene oxide, is likely to trade stably for now. Steady shipments are seen in the East China market, with manageable spot supply pressure. Downstream industries' own weak demand limits rigid consumption of raw materials. Low-price ethylene transactions have increased, but producers show little willingness to further discount, suggesting prices may continue their stable trend with potential bottom support from costs. Monomer holders are offering narrow discounts to move inventory, but market trading atmosphere is poor. Downstream buyers have low purchasing enthusiasm, mostly adopting a wait-and-see attitude, with transactions negotiated on a case-by-case basis. In summary, East China EPEG prices are projected to range between 10,000 and 10,200 CNY/ton.

③ Monoethylene Glycol (Related Product): Geopolitical uncertainties persist, keeping crude oil prices high. MEG rebounded after consecutive declines, but under expectations of tight supply, upward momentum is insufficient, lacking sustainability for the rebound. Tomorrow's East China spot self-pickup price is estimated to be in the range of 5,700–5,800 CNY/ton.

6. Data Calendar

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