The Supply of EO Was Tight During Aug 4-10, 2017

1. EO Market Analysis

The Chinese ethylene oxide (EO) market increased this week. Up to August 10, the EO fixed price in Sinopec Shanghai Company was RMB 9,300/mt, which was up 3% W-O-W. The overall EO price increased RMB 300/mt. As the ethylene prices were at a high level and demand exceeded supply, the supply of EO was tight and EO prices increased.

In the short term, the EO factories mainly produced ethylene glycol because the ethylene glycol was at a high level. Jiangsu Sailboat Petrochemical increased its operating rate slightly, and the supply for EO was limited. A 100kt/a unit in Sanjiang Chemical was taking overhaul , and produced ethylene glycol mainly. The operating rates of other units in Sanjiang Chemical were in a low level. It is expected that Sinopec Maoming Company will start a 200kt/a unit on August 20.

2. Forecast

The EO supply will be still tight. Limited EO orders were in small amount, and the EO prices will be heard to be RMB 10,000/mt, and EO will be still out of stock. The ethylene glycol market will be firm clearly, and will maintain uptrend in the short term. As a result, increasing the EO price will be the most promising way to stimulate EO factories to increase the supply. It is predicted that the EO market will maintain the uptrend.