Plunge in Crude Oil Curtails Offers for Electrolytes in China
- 28-Sep-2022 12:52 PM
- Journalist: Li Hua
Singapore: In mid-September, the Chinese Electrolytes market, i.e., primarily utilized in the Electric Vehicles Battery segment, has weakened tremendously. The sentiments amongst the spot suppliers have pressurized to ease the quotations for Ethylene Carbonate, Dimethyl Carbonate, and Propylene Carbonate in the domestic market to sustain netbacks. In the third week of September, the Crude Oil market witnessed a drop of 5% to the lowest level in the past eight months, followed by the appreciation of the US Dollar hitting the highest in more than two decades. In response, fears of a further hike in interest rates might instigate recession in major economies, besides a possibility of cutting the demand for Crude Oil in the international market.
Over the past few weeks, the Chinese market faced several difficulties on numerous economic and commercial levels, further coupled with the uncertainty of the COVID curbs and disruptions caused by the ongoing power rationing in business-central provinces across China. The vital cause for the power rationing is majorly credited to the region's extreme heat in 2022, which dropped water levels across major hydropower plants and led to the curtailment of hydroelectricity generation. As a ripple effect, the authorities forced the manufacturers to temporarily reduce or shut down the operation at manufacturing facilities, especially in the Southern region.
As per the ChemAnalyst pricing intelligence, during the third week of September, the key Electrolytes primarily used in the EV battery segments like Propylene Carbonate, Dimethyl Carbonate, and Ethylene Carbonate were impacted proportionally by the current situation of the domestic and international market. The average offers registered a downfall of 2.99%, 8.26%, and 5.17%, respectively. Although the upcoming short-term aspect is unclear, most factors depend on the domestic market's developments.