Global Ethylene Dichloride Prices Slump Due to a Steep Drop in Demand
- 14-Dec-2022 3:46 PM
- Journalist: Motoki Sasaki
Hamburg, Germany- The price of Ethylene Dichloride (EDC) across the globe continued to showcase a bearish price trend in the wake of weak trading fundamentals. This week, the price of EDC in the German market remains under pressure from higher utility and energy costs, along with weak demand and a thin profit margin. With the recession and rising inflation concerns, Germany's EDC profit margins continued to come under further threat this week.
The downtrend momentum was observed due to sufficient product stocks from the United Kingdom (UK) and Belgium, resulting in stockpiling inventories in the European market. Major EDC producers in Europe inched lower their product prices to clear their existing stocks by the year-end. In Germany, the market trading fundamentals suffered from lower demand for EDC from downstream Polyvinyl Chloride (PVC) industries. With the week ending on 09th Dec, the price of EDC in Germany slumped to USD 300/ton FD Hamburg.
In the US, the EDC market faced economic uncertainty with sluggish demand from the downstream PVC market. EDC demand softened with lower market fundamentals and high energy costs that forced production cutbacks. In the region, export and domestic prices have tracked weak price trends amid a lack of buying activity. Suppliers have been mostly reluctant to raise the offers, sticking to the sidelines amid reduced activities in their end sector. Demand and trading activities have been repressed in the US market due to prolonged financial and economic crises. Even though a cost decline is expected, the forthcoming New Year and upstream crude and Natural Gas market fluctuations keep raising questions about the demand standpoint.
As per ChemAnalyst, EDC is anticipated to follow a stable price trend in the global market with oscillations in crude and Natural Gas prices. Downstream PVC market fundamentals will remain feeble, with limited exports from the US and Belgium to the global market. It is anticipated that bearish offerings due to confined demand will still remain a concern for the major producers. It is exceptionally far-fetched that demand will not improve in the near future as the market will close for a few days toward the end of December due to holidays.
