Ethylene Oxide: Market Summary and Outlook to 2022

Ethylene Oxide: Market Summary and Outlook to 2022

In 2022, in the face of repeated global new crown epidemics, sudden regional conflicts, energy and raw material prices fluctuate sharply this year. This year the domestic ethylene oxide market ups and downs, subject to the terminal infrastructure investment weaker than expected, demand clamped ethylene oxide market more in the cost line near or below the cost line operation, price fluctuations more dependent on the raw material ethylene price changes. Profits are far less than the same period in 2021, the enterprises overhaul plan one after another, the second half of the supply tends to tighten, the atmosphere gradually eased, the volume has picked up, manufacturers maintain low storage, but the raw material ethylene prices step by step, in the "golden nine silver ten" peak season market recovery is slow, in the face of the epidemic is still ongoing, the Russian-Ukrainian conflict is still in the stalemate, downstream In the face of the continuing epidemic, the Russian-Ukrainian conflict, the downstream cost increase, the market shrinkage is difficult to boost a series of new challenges and new contradictions, market demand recovery may be slow.

Looking at the price operation in 2022, the domestic ethylene oxide market will maintain a downward trend in the operating range. The trend in the first half of the year is relatively stable, and the trend in the second half of the year is oscillating. Taking the East China market as an example, the high point of ethylene oxide during the year was in the first half of the year to RMB8,200/tonne; the low point of the year was in the second half of the year to RMB6,300/tonne; the weakness of the market in the second half of the year was obvious; the annual average price in 2022 was RMB7,354/tonne, down RMB417/tonne this year compared with last year, and the overall trend was obviously weak compared with last year.

At the beginning of the year, under the support of the cost side, the price rose slightly all the way to the highest point of the year in February at RMB8,200/tonne, after which although ethylene followed crude oil and naphtha price fluctuations upwards, and the downstream had difficulty in accepting the increasing high production costs, resulting in ethylene oxide maintaining a stable price from February to May; in early June, the logistics problems caused by the blockade and restrictions related to the coronavirus inhibited downstream demand. In early June, due to logistical problems caused by the blockade and restrictions related to the coronavirus, downstream demand was suppressed, coupled with its own device start-up load was not high, ethylene began to drop significantly, ethylene oxide cost pressure under the relaxation, device load was increased, the field supply was slightly loose, but downstream demand was not as expected, ethylene oxide quotes began to go down for the first time after more than three months of stagnation, downstream demand has been lukewarm state, in August fell to the lowest point of the year 6300 yuan / tonne; serious pressure on the field The downstream has already entered the off-season, and most of them cut their operating rates to maintain the balance of production and sales; ethylene oxide is not good enough and the push up is weak.

In 2023, 2.74 million tonnes of new production capacity is expected to be added, including 1.6 million tonnes/year in East China, 280,000 tonnes/year in South China and 810,000 tonnes/year in Northeast China, with East China still being the main concentration area for ethylene oxide. The expansion capacity of private sector leads the mainstream of the market, and is expected to have more say in the market as the proportion of private sector gradually increases.

Looking ahead to 2023, ethylene production capacity increases. Domestic ethylene oxide new production capacity is released in an orderly manner, mostly supporting with downstream devices, but the market is still growing outside the release. This year to see the construction-related downstream performance weaker than expected, the future of ethylene oxide or regional oversupply concerns. At the same time, with the increase in the proportion of private enterprises, ethylene oxide market fluctuations or can be more abundant. Expected 2023 ethylene oxide market price more in 6000-8000 yuan / ton range operation.