China ethylene oxide prices hit multi-year high, squeezing downstream margins
Domestic ethylene oxide prices in China surged over 21% in late September to 9,200-10,100 yuan/ton, the highest since November 2021, driven by rising crude oil costs from Middle East tensions, production shifts to ethylene glycol, and plant maintenance. Integrated producers like Satellite Chemical benefit, while downstream firms tied to real estate face margin compression.
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Ethylene Oxide Prices Hit 2024 High, Diverging Performance for Listed Companies
According to Securities Times, domestic ethylene oxide prices surged in late September, reaching 9,200-9,700 yuan/ton in East China and over 10,100 yuan/ton in Central China by September 21. This represents a gain of over 21% from early September, setting a new record for the year and the highest level since November 2021. The price rally is attributed to upstream cost pass-through and chain-wide linkage. The impact on listed companies varies sharply: integrated upstream firms with 'ethylene-ethylene oxide-derivative' chains, such as Satellite Chemical, benefit from cost advantages and achieve volume-price growth. In contrast, downstream deep-processing companies face a 'raw material up, product down' scissors effect, especially those tied to real estate and infrastructure, which are under pressure and forced to pivot to new energy and new materials. Some fine chemical firms with pricing power can pass on costs and improve gross margins.
Read sourceEthylene Oxide Prices Hit 2025 Highs, Driving Profit Divergence Along the Supply Chain
Ethylene oxide (EO) prices in China have surged to their highest levels since November 2021, with the华东 market reaching 9,200-9,700 yuan/ton and华中 hitting 10,100 yuan/ton by September 21, a rise of over 21% from early September. The rally is driven by three factors: rising feedstock costs due to Middle East geopolitical tensions, production shifts to co-product ethylene glycol (EG) for higher margins, and low port inventories. Analysts from Longzhong and JLC Network attribute the price spike to strong cost support from crude oil, which briefly exceeded $100/barrel on September 11, and tight EO supply as EO/EG swing units prioritize EG production. Profitability diverges sharply by feedstock: ethylene-based producers enjoy healthy margins of around 1,060-1,160 yuan/ton, while methanol-to-olefins (MTO) producers face losses due to high methanol costs. Listed companies with integrated 'ethylene-EO-derivative' chains, such as Satellite Chemical, benefit from cost advantages, while downstream firms tied to construction and real estate face margin compression. Looking ahead, analyst Dong Mixin forecasts high EO prices to persist due to ongoing geopolitical uncertainty and tight supply, though the 'golden September and silver October' peak season and new capacity additions may lead to a period of high-level volatility and supply-demand rebalancing.
Read sourceEthylene Oxide Prices Hit 2024 High, Causing Divergent Performance Among Listed Companies
As of late September, ethylene oxide prices in China have surged to their highest level since November 2021, with the East China market reaching 9,200-9,700 yuan per ton and Central China exceeding 10,100 yuan per ton, a rise of over 21% from early September. The price spike is attributed to upstream cost transmission and industrial chain co-movement. The article reports that listed companies along the ethylene oxide chain are showing divergent financial results. Integrated upstream players like Satellite Chemical, which have cost advantages from ethane cracking, are benefiting from both higher volumes and prices. In contrast, downstream deep-processing firms, particularly those tied to the real estate and infrastructure sectors via polyether monomers, are facing a 'scissors gap' of rising raw material costs and falling product prices, forcing them to pivot toward new energy and new materials. Some fine chemical companies with strong pricing power have managed to pass on costs and improve gross margins.
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Ethylene Oxide Prices Surge 21% in September Driven by Cost, Supply, and Demand
In late September, domestic ethylene oxide prices in China surged, with East China prices reaching 9,200-9,700 yuan/ton and Central China hitting 10,100 yuan/ton, a 21% increase from early September, marking a new high since November 2021. According to Longzhong Information, Sinopec East China's listing price rose from 7,900 yuan/ton on September 3 to 9,700 yuan/ton by September 18. Analysts attribute the rally to three factors: rising upstream ethylene costs (up 22% since early August) driven by crude oil gains amid Middle East tensions; tightened supply due to plant maintenance and co-production units shifting to ethylene glycol production for higher margins; and robust downstream demand during the peak 'Golden September' season. Longzhong analyst Dong Mingxin noted that ethylene glycol prices hit a near-term high, exacerbating ethylene oxide supply tightness. Jinlianchuang analyst Zhao Pengfei highlighted that geopolitical risks in the Middle East have disrupted supply expectations. Downstream products like polycarboxylate superplasticizer monomer and ethanolamine also saw price increases. Analysts forecast high ethylene oxide prices in the near term, but upside may be limited as high costs pressure end-users.
Read sourceEthylene Oxide Prices Hit 2023 High, Causing Profit Divergence Along the Supply Chain
In late September, domestic ethylene oxide (EO) prices in China surged to a new 2023 high, reaching 9,200-9,700 yuan/ton in East China and over 10,100 yuan/ton in Central China, a rise of over 21% from early September. The price spike is attributed to a triple squeeze: rising raw material costs due to Middle East geopolitical tensions, supply diversion as co-production units shift to the more profitable ethylene glycol (EG), and low port inventories. Analysts from Longzhong and JLC Network note that the conflict has pushed oil prices higher, providing strong cost support. The supply tightness is exacerbated by maintenance at several plants and low EG imports. Profitability diverges sharply along the supply chain: integrated producers like Satellite Chemical benefit from cost advantages, while downstream derivative companies, especially those tied to real estate and infrastructure, face margin compression. Some firms, like Aoke Chemical, are pivoting to new energy battery materials via acquisitions. Analysts forecast EO prices will remain high in the near term due to ongoing geopolitical uncertainty and tight supply, but the market may enter a phase of high-level volatility and rebalancing as new capacity comes online.
Read sourceEthylene Oxide Prices Hit 2023 High as Supply Tightens and Costs Rise
In late September, Chinese domestic ethylene oxide (EO) prices surged to their highest level since November 2021, with the华东 (East China) market reaching 9,200-9,700 yuan/ton and Central China hitting 10,100 yuan/ton, a gain of over 21% from early September. Analysts attribute the rally to strong cost support from rising crude oil and ethylene prices, exacerbated by geopolitical tensions in the Middle East. A key factor is the production shift at integrated EO/ethylene glycol (EG) plants, which have diverted output to the more profitable EG, tightening EO supply. EO weekly output fell 1.20% to 115,400 tons, with capacity utilization at 51.82%. Profitability diverges sharply by feedstock: ethylene-based producers enjoy healthy margins of around 1,100 yuan/ton, while methanol-to-olefins (MTO) producers face cost pressure. Downstream derivative companies show mixed results, with integrated players benefiting from cost advantages. Analysts forecast EO prices will remain high in the near term due to sustained supply tightness and geopolitical uncertainty, though the market may enter a rebalancing phase amid the peak season and new capacity additions.
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