Global EDC Market Shows Stability Amidst Regional Fluctuations

Hamburg (Germany): During the week ending on March 16th, 2024, the demand for Ethylene Dichloride (EDC) remained stable in most countries, with a slight upward trend observed in China following the holidays. Conversely, in Germany, prices remained stable, with buyers showing less activity in the market and fewer new orders being placed. Similarly, in Saudi Arabia, as the largest exporter of crude oil, the supply chain for crude oil and its derivatives remained smooth, with no major fundamental changes observed in the EDC market across all markets.

Throughout the same week, EDC prices remained stable at USD 395/MT but exhibited an upward trend. Despite an increase in the prices of the upstream market for Ethylene, there was no notable impact observed on EDC prices. However, prices of PVC experienced a slight increase during this period, albeit with minimal fluctuation, thus maintaining stability overall. Following the Spring Festival, the spot market price of PVC remained steady, showing a slight upward trend. At present, the spot market situation is considered average, with relatively light trading activity leading to stability in the EDC market. Manufacturer quotations were predominantly stable, while traders exhibited flexibility in their pricing strategies, leading to fluctuations in market transaction prices.

Meanwhile, EDC prices in the German market remained stable during the last week but continued their upward trend from the past few weeks. Due to the shortened number of working days in February, production levels decreased, further exacerbating the incline in EDC prices. Despite facing disruptions in logistics and witnessing soaring freight rates due to the Red Sea turmoil, the PVC markets in Germany demonstrated resilience, maintaining stability for the second consecutive month in February, thus supporting EDC price stability. Despite recent adjustments, global ocean freight rates continued to remain slightly higher than pre-crisis levels, thereby contributing to the upward trajectory in EDC prices. In response, producers were strategizing to adapt to the supply-demand dynamics in the coming month to navigate through these challenges and market fluctuations.

Similarly, in the Middle Eastern EDC market, the demand for EDC in the country remained steady, largely attributed to subdued trading activity and cautious operations among downstream enterprises. Despite these measures, the cost of feedstock Ethylene saw a modest increase of 5.1% over the week. Saudi Arabia remained stable as the country is the biggest producer of crude oil, and there were no supply issues with the product.

According to ChemAnalyst, the prices of EDC are expected to remain stable in the upcoming weeks due to low global demand and reduced production of EDC because of decreased demand and limited trading activity. Given the current geopolitical situation, it is anticipated that prices will remain stable in the coming weeks. The demand from the downstream PVC market has been stable in recent weeks and is expected to remain so in the future. However, in China, prices of EDC are projected to experience an upward trend due to cautious downstream demand and a focus on on-demand procurement. Additionally, it is predicted that the local refining naphtha market will consolidate at a high level in the near future.