Ethylene oxide (EO) prices in eastern China have risen by yuan (CNY) 200/tonne to CNY10,800/tonne, the first increase since January, market participants said on 6 August. EO prices in southern China rose by CNY100/tonne to CNY10,700/tonne EXWH (ex-warehouse), they added.
Pressured by rising feedstock prices, EO prices were pushed higher despite abundance in supply and dull downstream demand. “It is the strength of [ethylene] prices that led to the increase in EO [prices],” said one trader.
Ethylene spot prices in northeast Asia continued to draw strength from tight supply even as downstream production cuts have become prevalent.
Meanwhile, the EO price hike was the first increase since 22 January 2014, when prices of EO in eastern China increased by CNY200/tonne to CNY10,600/tonne EXWH, according to ICIS
EO prices had stayed flat for the past several months owing to surplus and weak downstream demand, in spite of peak EO plant maintenance in June.
Monoethylene glycol (MEG) prices in China shed $4-7/tonne to $983-991/tonne CFR China Main Port (CMP) during the week ended 1 August, ICIS data showed.
With sufficient supply of cargoes in the market and weaker downstream polyester demand in the short term, prices of MEG would be under some downward pressure.The higher port inventories in the eastern coast of China are likely to dampen sentiments of MEG traders. MEG is the biggest downstream intake of the EO feedstock. Meanwhile, the uptick in EO feedstock prices is having a limited impact on prices on ethanolamines so far owing to the widespread lacklustre demand for the homologues amid ample supply, market participants said.
The domestic deals for bulk diethanolamines (DEA) remained unchanged at CNY10,800/tonne on cash-payment terms, or the equivalent of around CNY11,400/tonne on a drummed basis.