Category

Countries

EDC Prices Fall in Europe and USA Due to Pessimistic Downstream Demand
EDC Prices Fall in Europe and USA Due to Pessimistic Downstream Demand

EDC Prices Fall in Europe and USA Due to Pessimistic Downstream Demand

  • 07-Aug-2023 5:08 PM
  • Journalist: Gabreilla Figueroa

The Ethylene Dichloride (EDC) price change in July 2023 resulted from the pessimistic demand in the downstream industry and lowered electricity costs across the European and USA markets. On the European demand side, the downstream PVC demand was prompted by the drop in the housing segment demand of the region coupled with uplifting interest rates by the European Central Bank. However, the polymer demand for EDC in the USA was concluded by reducing the production run rates in the line of low demand fundamentals in the week ending August 4, 2023.

In the USA, the production cut in the downstream PVC manufacturing unit caused a slump in inquiries for EDC amidst high stock availability in the first week of August 2023. Olin Corporation faced significant challenges with its Vinyl Chloride Monomer (VCM) unit located in Freeport, Texas. In March, the company had to shut down the 835,000 metric tons per year VCM unit for a planned turnaround. However, this maintenance process was extended by almost two months beyond the initial schedule, causing a delay in resuming operations. As a result, Olin announced in June the prolonged outage. In mid-June, the VCM unit was finally restarted, but due to lingering issues, it had to be shut down again on July 12 for additional repairs. Olin has been running the unit at reduced rates during this period, trying to manage the situation effectively, prompting the EDC consumption, as during the downstream VCM outages, Olin's participation in global EDC markets remained relatively stable due to prevailing market weakness. However, there has been a noticeable increase in PVC prices in recent weeks due to low inventories and reduced production run rates. Olin's President, Mr. Sutton, expressed optimism about the potential for non-integrated PVC players to get back in business once market conditions improve and affect the EDC price trend in the upcoming weeks.

In Europe, the EDC prices were static during the first week of August 2023 due to adequate inventories and low demand from the PVC manufacturing industry. Moreover, from the supply perspective, the feedstock Ethylene prices were stagnant in the line of surged level of inventories. A hike in the interest rate weighed on the housing market of Europe in July 2023, impacting EDC consumption in the PVC-producing industries.

As per ChemAnalyst, the EDC price trajectory is projected to remain on the downward side, along with the low downstream inquiries in the global market and ample availability of stocks. In addition, the product's price might be affected by the upcoming Hurricane season and reduction in the operational rates at downstream sectors of the USA, prompting the price momentum of EDC during this time frame. On the upstream side, Ethylene prices may decline in the US market due to surplus supplies and weakening of consumption, which may challenge the market of EDC further in August 2023.

Related News

Ethylene Dichloride Prices Hit by APAC Construction Slump and European Market Decline
  • 14-Jun-2024 8:14 PM
  • Journalist: Kim Chul Son
Global EDC Market: Navigating Volatility Amid Currency Fluctuations and Economic Shifts
  • 29-May-2024 4:42 PM
  • Journalist: Stella Fernandes
Global EDC Markets Navigate Turbulence Amid Cracker Closures and Logistics Challenges
  • 17-May-2024 3:39 PM
  • Journalist: Emilia Jackson
Global Ethylene Dichloride Prices Tumble on Weak Crude Oil Support
  • 01-May-2024 3:48 PM
  • Journalist: Francis Stokes