In the first half of March, prices of ethylene oxide in the U.S. dipped, primarily due to a pullback of feedstock ethylene prices despite stable demand for ethylene oxide. The downward price movement emerged from the declining prices of raw materials and stable consumption levels. In Europe, ethylene oxide prices decreased in conjunction with declining feedstock ethylene pricing, but demand varied by region. Market participants continue to monitor the feedstock pricing and regional variations in demand which could affect the pricing of ethylene oxide in the coming weeks.

The U.S. ethylene oxide price declines were attributed in the early to mid-March time frame to decreased production costs, following signs of softness in feedstock ethylene prices. The lower cost of ethylene decreased overall costs to produce ethylene oxide and sparked a general price decline. Reduced activity in these markets, uncommonly high availability of ethylene oxide was reported. The oversupply and a subsequent price drop as sellers sought to unload stock resulted from the high availability. 

Similarly, demand remained stabled from mono ethylene glycol, diethylene glycol, polytetramethylene ether glycol and glycol ethers. MEG, widely consumed in polyester and antifreeze production, DEG used in solvents and resins, PTMEG in spandex fibres and elastomers, and glycol ethers widely used in paints and coatings. The steadiness in demand for ethylene oxide allowed the price decrease to occur more gently.

In Germany, prices for ethylene oxide declined during the first half of March due to lower production costs from a decrease in feedstock ethylene prices. This downward pressure on costs had led to lower prices, despite shifts in demand. Additionally, the decline was further exacerbated by trader destocking activities and an overall downturn in global market conditions.

Demand varied across the region, further influencing a price drop. Demand for mono ethylene glycol increased marginally, whereas demand for diethylene glycol decreased. Lastly, demand for PTMEG and glycol ethers remained stable, creating a mixed market signal overall. Nevertheless, the lack of any increased demand among the large end-use downstream applications contributed to the decidedly bearish price trend across the region.

As per Chemanalyst, several factors are likely to influence the trend of lowering prices for ethylene oxide in the US and Europe countries in the upcoming month, due to even weak feedstock ethylene support which may limit the control on market gains. Ethylene oxide prices are expected to face further pressure due to challenging economic conditions in neighboring European countries. Besides, rising inventories may encourage traders to engage in destocking activities, hence contributing to additional downward pressure on prices in the coming months.