Ethylene oxide prices depreciated in both the U.S. and Germany during the first week of April, continuing the downward trend from late March due to lacklustre demand and ample overall supply in the domestic market.

In the U.S, ethylene oxide prices decreased for this week primarily driven by low demand and lower costs on feedstock ethylene prices. Falling feedstock prices lowered production costs, which caused manufacturers to lower their pricing to remain competitive. Overall, supply conditions in the U.S were high, with no unplanned outages or other issues reported in manufacturing operations. In addition, production rates remained steady, and inventories were high which contributed to oversupply within the market. The ongoing oversupply coinciding with decreased demand from a few of the key downstream sectors, including Mono Ethylene Glycol and Diethylene Glycol, contributing to downward pressure on ethylene oxide prices. Additionally, demand from the downstream derivatives like glycol ethers and polytetramethylene ether glycol remained stable in the US despite relatively weaker demand.

In Germany, ethylene oxide market experienced a decrease in prices during the same period, although feedstock ethylene prices remained stable. Demand was the primary driver of the ethylene oxide price decline, with weak demand from the MEG sector based on reduced demand from textile and packaging applications. While demand from DEG increased slightly, PTMEG and Glycol Ethers held steady with similar market conditions to the U.S.

Production levels in Germany created a mild oversupply condition with high inventory levels and further supported the downward trend of ethylene oxide prices. On another note, ongoing congestion at the port of Hamburg has raised some concerns regarding potential logistical issues. If the congestion is prolonged, it could start to slow supply flow and apply mild upward pressure to prices in the upcoming week. Although ethylene oxide price levels remain on a downward trend, any shift in economic activity or abrupt change in supply chain may impact market conditions within the next few weeks. For the time being, both the U.S. and German ethylene oxide markets are expected to remain under pressure as the oversupply condition remains.

Looking forward, ChemAnalyst expects that prices for ethylene oxide in the U.S. and Germany are anticipated to stay under downward pressure in the upcoming weeks due to soft downstream demand and ample supply. In the USA, further weakness in MEG and DEG consumption, along with steady production and decreasing feedstock ethylene prices, will likely keep a bearish tone in the market. Similarly, in Germany, steady manufacturing output and demand, particularly from the textile and packaging industries, would likely lead to a continuation of ethylene oxide price decline. Nevertheless, any logistics disruptions such as the continuing port congestion at the Hamburg ports could provide short-term supply tightness to stop additional price decline of ethylene oxide.