China ethylene oxide extends gains on tight feedstock supply

SINGAPORE (ICIS)–China’s prices of ethylene oxide (EO) have risen for a second consecutive week owing to supply tightness in raw material ethylene (C2) amid cracker turnarounds, market participants said on Thursday.

In the week ended 9 March, domestic Chinese EO prices rose by yuan (CNY) 300/tonne ($46/tonne) to CNY7,500/tonne EXWH (ex-warehouse) – their highest level since 18 November last year.

“There is not enough raw material of ethylene. C2 prices have climbed up a lot,” said one market participant.

Chinese EO prices rose by CNY300/tonne during the week ended 2 March to CNY7,200/tonne EXWH, the first market gain since 25 November 2015, according to ICIS data.

On 4 March, Asian ethylene prices surged by $90-120/tonne week on week to $1,050-1,120/tonne CFR (cost and freight) NE (northeast) Asia; and by $70-120/tonne to $1,050-1,120/tonne CFR SE (southeast) Asia, the data showed.

Spot ethylene prices rose to levels last seen on 2 December 2015, on the back of strong demand, limited supply and rising downstream prices, led mainly by gains in the styrene monomer (SM) market.

Meanwhile, China’s Sanjiang Fine Chemicals has shut its 60,000 tonne/year EO line in Zhejiang province because of insufficient feedstock ethylene.

Sanjiang Fine Chemical’s 380,000 tonne/year EO/monoethylene glycol (MEG) swing plant and two 200,000 tonne/year EO lines are running but at reduced capacity. Its other two 60,000 tonne/year EO lines were shut since last year because of weak economics.

Sinopec’s Maoming Petrochemical has shut its 360,000 tonne/year cracker in Guangdong from 1 March for maintenance, which is expected to end on 6 April.

Wuhan Petrochemical will also conduct maintenance at its 800,000 tonne/year cracker in Hubei from 6 April to 20 May.

By Felicia Loo

($1 = CNY6.51)