Supply/demand equilibrium oscillates the Global Ethylene Dichloride market with demand disruption

The pricing of Ethylene Dichloride (EDC) globally has shown fluctuations and varied patterns due to disruptions in the supply and demand dynamics. In Germany, particularly, prices have surged owing to heightened market purchases and increased spot purchasing activities. Conversely, prices in China and Saudi Arabia have remained steady, indicating a general stability in global EDC prices. Nonetheless, ongoing disruptions in the supply chain are driving price hikes in specific regions.

In Germany, prices for EDC within the European region saw a rise of approximately 1.5% from USD 345/MT to USD 350/MT FD Hamburg by the week ending on February 16th. This increase was attributed to a combination of decreased supply and increased demand. In the Mediterranean region, there was a positive shift in sentiment due to reduced supply from 'Kem One,' a chlorine producer facing technical challenges and experiencing low chlorine demand in its French plants. Kem One's operational limitations resulted in higher import costs, thereby complicating and elevating expenses for procuring the product compared to previous lower prices. The European market encountered limited import alternatives, influenced by escalating freight expenses and delays in product inflow. To stimulate demand for EDC in Germany, various measures were implemented, leading to a subsequent upsurge in buying interest.

In the Saudi Arabian market of the Middle East, EDC prices have remained stable at USN 295/MT for the past four weeks, despite increasing crude oil and upstream ethylene prices. Saudi Arabia, being the second-largest producer and seller of EDC, maintains price stability due to a consistent level of inventories. The country, as a major crude oil producer, does not face supply issues for both global and domestic markets, contributing to the lack of volatility in EDC prices.

In the APAC region, specifically in China, EDC prices have remained steady at USD 390/MT FOB Shanghai. Stable upstream ethylene prices have contributed to the consistency in EDC prices. Downstream, PVC prices have also remained stable, leading to overall stagnant prices. As the end of the year approaches, some smaller processing plants in China are considering holiday breaks due to a slowdown in demand, high corporate inventories, and cautious actual transactions.

According to ChemAnalyst, there is an anticipation of increasing prices in the coming weeks. As an OPEC+ member, Saudi Arabia had previously postponed its cuts on oil production, and it is expected that the country will take actions in the upcoming weeks. This decision is likely to impact the downstream prices of crude, causing fluctuations in the EDC market. Additionally, in China, as the country approaches its Lunar New Year and production resumes, there is an expectation of increased demand, leading to higher prices. In the European region, specifically in Germany, the country has adapted to a new normal characterized by frequent and random attacks in the Red Sea area and elevated prices. Consequently, there is an anticipation that prices will continue to rise in Germany.