Global EDC Prices Show Signs of Spike in October 2023 as Production Cost Ignite Market Trend

The Ethylene Dichloride (EDC) prices are experiencing a positive market outlook for October 2023 amidst high production costs in line with the recent spike in the upstream Crude oil prices across the globe. The feedstock Ethylene producers also tend to benefit from the higher oil prices amid their reliance on the oil-based Naptha market. The oil price rise was followed by the attack by Hamas on Israel and is expected to be temporary or extended depending upon the escalation of the conflict impacting countries in the Middle East. These upstream factors are anticipated to affect the EDC price dynamics in the global market, overweighing the demand aspect.

The EDC prices in the USA will likely rise in October 2023 as the production costs seem higher despite stability in the demand fundamentals. From the upstream perspective, the upstream oil prices jumped this week amid the extension of the Israel-Hamas conflict to its third day, followed by the attack on Israel by Palestinian militants Hamas. As per the latest insights, the global benchmark Brent crude oil prices settled at 4.2% higher per barrel, while the US West Texas Intermediate prices rose 4.3% per barrel, the biggest single-day gain for both benchmarks since April. As a ripple effect, the EDC prices show signs of a surge in the USA in October amidst high production costs in line with the feedstock Ethylene prices' reliance on crude oil value fluctuations. However, the southward September EDC price trend resulted from the low downstream PVC consumption amidst sluggish consumer confidence in the US market.

In the APAC region, the EDC prices experienced a rise in the week ending October 6, 2023, backed by the high input costs and production run rates reduction to combat the declines amidst low demand fundamentals. Moreover, the maintenance shutdown at Tokuyama Corporation in Japan with a total capacity of 45000 TPM during October 2023 also shifted the demand to China for EDC as the players anticipated the replenishment of inventories after the National Day Holidays and also led to concerns about supply pressure in the future relative to high production costs in the coming weeks of the month.

As per the ChemAnalyst, the EDC prices may rise in October 2023 across the globe because of constrained supplies amidst high input prices and on-need basis procurement in downstream segments. The production challenges may elevate the EDC price dynamics amidst the elevation in the input costs in the line of a surge in the crude oil future values and feedstock Ethylene costs. However, the downstream PVC demand remains a reflection of hope amid global headwinds in the last quarter of 2023.