The US Ethylene Oxide market experienced a significant surge in prices in December 2024, with a notable 3.54% increase. This price escalation is expected to continue in the first half of 2025, driven by a confluence of factors, including an upcoming wave of maintenance turnarounds and supply constraints in both Ethylene Oxide and its key derivatives.

In the months ahead, at least several major producers of Ethylene Oxide and its derivatives in the US are scheduled for maintenance between February and June 2025. The maintenance turnarounds can range from two weeks to up to 45 days, which could lead to significant disruptions in supply.

The timing of these planned turnarounds is particularly challenging for the market. As a net exporter of Ethylene Oxide derivatives, the US typically relies on smooth production to meet both domestic and international demand. The expected Ethylene Oxide supply squeeze is forecasted to intensify the spot market more than contracted volumes, as the US has historically been a key exporter of MEG, DEG, and TEG. With spot availability likely to be constrained, the surge in prices will likely extend beyond the initial disruptions, further driving up costs for buyers.

In addition to the Ethylene Oxide and derivative plant turnarounds, several steam-cracker maintenance projects are planned for the first quarter of 2025, which will reduce the availability of feedstock ethylene. This, in turn, could result in higher ethylene costs, placing further pressure on the overall Ethylene Oxide supply chain. The combination of these factors is anticipated to push prices upward, particularly in the first quarter when demand typically remains stable or slightly lower.

The US is entering the turnaround season with minimal inventories of Ethylene Oxide derivatives, exacerbated by prior production constraints in September and October of 2024. These earlier production interruptions further tightened supply, leading to difficulties in spot market availability. However, as seasonal demand began to wane during that period, prices remained relatively stable.

Now, with an expected return to more significant demand levels in the first quarter of 2025, some restocking activities are anticipated. Market participants are keenly aware that the heavy turnaround season in the first half of 2025 could hamper exports, particularly as the US is expected to face additional domestic demand for Ethylene Oxide derivatives. These exports, which have already shown robust growth in recent months may slow in the face of tightening supply conditions.

As the US moves into the first quarter of 2025, Ethylene Oxide and its derivatives are expected to remain in a tight supply situation. Market participants anticipate the price increases observed in December to persist, driven by the combination of scheduled turnarounds, constrained feedstock supply, and the potential for restocking activity. The anticipated squeeze in the spot market, combined with ongoing maintenance-related disruptions, suggests that the upward price trend will continue well into the early months of 2025. Unless unforeseen disruptions occur, the market is likely to experience a continued tightening of supplies, with prices expected to remain elevated as demand recovers, and export activities slow.