Ethylene Oxide markets have extended modest gains into the fourth week of August 2024 across the European market as players are slowly returning to their desks following a long holiday this week. The summer lull was eclipsed by regional hiccups, paving the way for hikes during the slowest trading month of the year. Even though buying indications were bearishly impacted by a downturn in the derivative sectors, some buyers stated that they continued to face struggle to maintain profitability in a dull demand environment.

In Germany, Ethylene Oxide prices saw an overall stability, with a slightly firmer trend on the back of disruptions in the supply chain rather than a surge in demand. The cost support from feedstock Ethylene was sufficient for Ethylene Oxide as its prices increased in recent weeks, leading to bullish market sentiments for Ethylene Oxide among the manufacturers. On the other hand, crude oil prices have been observed on the higher end, as an increase in violence in the Middle East prompted worry about supply while in the US the Fed signaled that it may cut interest rates next month. The strong oil prices have further supported the current pricing trend of Ethylene Oxide. Furthermore, the manufacturing firms have been operating at low rates on account of the tight supply of feedstock Ethylene, resulting in a limited supply of Ethylene Oxide across the domestic market which supported the manufacturers to slightly revise their offers. Also, the maintenance of leading enterprises such as Shell Chemicals, and Moerdijk in the Netherlands has directly affected the market supply. The prices of Ethylene Oxide FD Hamburg were settled at USD 1350/MT with a week-on-week slight increment of USD 10/MT during the week ending 23rd August.

Nevertheless, demand for Ethylene Oxide from the downstream Ethylene Glycol and Ethoxylates market has continued to remain weak as consumption from the key end-user sector has been sluggish in the domestic market. The spot market transactions were also average with several buyers remaining on the sidelines amidst tepid downstream demand. Moreover, sentiment has declined considerably at companies in Germany. The Ifo Business Climate Index fell from 87.0 points in July, to 86.6 in August. The companies were less satisfied with the current business situation. But currently, it has a limited impact on the prices of Ethylene Oxide. Overall, low inventories and high domestic production costs have dominated the market of Ethylene Oxide.

In the short term, ChemAnalyst anticipates prices of Ethylene Oxide might show stagnancy with marginal hikes in the European market on account of inadequate regional inventories. The production cost of Ethylene Oxide is expected to be stable as feedstock Ethylene prices might stabilize in the coming weeks. However, the September outlook remains strong as buyers are back to replenish their stocks following the summer break holidays.