Ethylene Carbonate Prices Inch Upwards Amidst Geopolitical Tensions in the Middle East

Hamburg, Germany: In the latter weeks of December 2023, the prices of Ethylene Carbonate demonstrated a slight uptick due to increased crude oil prices. Nevertheless, demand in the downstream consumer market has remained subdued, with Ethylene Carbonate purchases primarily occurring on a demand-driven basis. Amid the Christmas and New Year holidays, most business operations were operating at lower rates, and market transactions were limited. Moreover, this month witnessed increased destocking of available inventories as consumers avoided holding excess Ethylene Carbonate inventories.

According to industry insiders, the electric vehicle (EV) sector is experiencing a standstill in the German market due to weak demand for Ethylene Carbonate in downstream sectors. With the decline in lithium salt prices, enthusiasm for new acquisitions has diminished among consumers, leading to a prevalent cautious approach. Some distributors have suggested the possibility that buyers may already have ample stock of Ethylene Carbonate or heavily depend on long-term contracts, eliminating the immediate need to participate in the spot market. As a consequence, the demand for Ethylene Carbonate in electrolytes and manufacturing firms has also suffered.

The weakness in domestic demand, particularly in consumption, including the Ethylene Carbonate market, indicates that surging consumer prices for various goods and services are also significantly impacting the market. Additionally, the contraction of the German economy, given its dominance in the trading circle, is also adversely affecting the Ethylene Carbonate market in other European Union countries.

Furthermore, a rise in oil prices was registered as concerns heightened over potential disruptions in global oil supplies due to an incident at Libya's primary oilfield, exacerbating existing tensions in the Middle East. Oil prices also surged following an escalation in Israel's airstrikes on the Gaza Strip. The conflict between Israel and the Iran-backed Palestinian Hamas group extended into Lebanon, resulting in the death of Hamas' deputy leader in Beirut, as per claims. As a result, the prices of upstream Ethylene and feedstock Ethylene oxide moved upwards due to supply concerns.

According to the ChemAnalyst pricing intelligence, Ethylene Carbonate prices are anticipated to demonstrate mixed trends in the first quarter of 2024. As per surveys done by industry experts, international oil prices will likely hover around $80 per barrel in 2024. According to the forecast, subdued global economic growth may limit demand for crude oil, while geopolitical tensions in the Middle East could potentially offer some support to crude oil prices, and eventually, Ethylene Carbonate might observe a bullish pricing trend.