An Uptick In The Production Rate Slowed The Price Of Ethylene Dichloride In Europe

Hamburg, Germany- With the start of the month, the price of Ethylene Dichloride (EDC) cooled, driven by rising availability and a substantial slowdown in demand from the downstream Poly Vinyl Chloride (PVC) market. Regional suppliers were grudging to cut the prices further to maintain their revenue and profit.

High energy and utility costs shrank the construction sector, where Polyvinyl Chloride has significant use in producing pipes, cables, and wire insulations. According to our trusted sources, Vynova, a leading PVC and chlor alkali company will move to give monthly prices instead of quarterly as the company's production units were hit by high electricity charges, and costs need to be revised often.

Exports from Germany and United Kingdom (UK) to the Netherlands and other European Nations slipped due to oversupplies and surging production rates among the regional manufacturing units.

However, with rising fuel costs, the transportation charges are still on the upper end. In Germany, a shortage of truck drivers and rising inflation still prevail.

In terms of the upstream Ethylene prices, the market is still affected by weak market sentiments and low purchasing rates. Fluctuations in crude and Natural Gas prices remained the critical factor for inadequate cost support for ethylene. The spread between feedstock ethylene and end-product Ethylene Dichloride (EDC) also shrinks, narrowing the venture's profit.

According to ChemAnalyst, the price of Ethylene Chloride (EDC) in the European market will reduce further as deterred demand for the new stock will hamper the prices. EDC contract prices will also decrease, coupled with lull demand, global bearishness, and expectation for further softening in the downstream Polyvinyl Chloride (PVC) market. The downstream construction sector will also remain affected by weak market fundamentals and muted demand. EDC spot prices will reduce with sufficient trading volume of products in the region. However, rising freight and transportation costs will remain a concern due to crude oil prices oscillating in the global market.