China’s Sinopec lowers EO prices on weaker derivative demand

05 December 2012 04:08  [Source: ICIS news]

SINGAPORE (ICIS)--Chinese petroleum company Sinopec has lowered its ethylene oxide (EO) prices after keeping them stable for five weeks because of a slowdown in demand from derivative sectors, a company source said on Wednesday.

EO prices in eastern China fell by yuan (CNY) 600/tonne ($96/tonne) to CNY12,400/tonne ex-warehouse (EXWH). Meanwhile, prices in northern China were cut by CNY700-800/tonne to CNY12,200-12,300/tonne EXWH, the source said.

“Demand [which is] mainly from the monopolyethylene glycol (MPEG) sector slowed down in December,” the source said.

MPEG is largely used in the construction sector, which typically enters its seasonal lull in demand from December to February.

Cold weather during these months, especially in northern China, hampers construction projects, the source added.

Poor margins in the derivative sectors, including ethanolamines, are another factor putting downward pressure on EO prices, market sources said.

Diethanolamines (DEA) prices fell by 5% in late November before EO prices decreased in the week ending 7 November, according to ICIS data.

($1 = CNY6.23)

By: Becky Zhang
+65 6780 4359

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