Stability in Ethylene Dichloride (EDC) Prices in USA Market Despite Fluctuations in Feedstock Market

The prices of Ethylene dichloride (EDC) showed remarkable stability in the week ending on 4th October. According to the analysts at ChemAnalyst, the stability in the prices was observed as a continuous trend from the past few months in the USA market. The stability in the prices was primarily driven by interplay of various factors which influenced the supply and demand dynamics of EDC in the market leading to stable prices. The prices stabilized at USD 245/MT FOB USGC USA in the first week of October.

Despite Ethylene feedstock prices trending lower in the USA market, EDC prices remained largely stable while VCM prices gained in the USA market. The prices remained stable amid supply constraints with demand fundamentals remained mixed. In the supply side, supply remained tight owing to several maintenance activities and outages in the recent weeks. While the supply side remained disrupted, demand of EDC in the construction sector remained lacklustre and fundamentals remained weak in previous weeks which led to the overall stability in the market and hence led to stable market prices.

The EDC spot market remained quiet throughout the month of September as suppliers hold limited supplies as demand remained subdued. EDC prices have continuously faced challenges amid low downstream demand from PVC producing industries as the main downstream application of EDC is PVC production. As PVC prices continued to fall in the market over the last two months, buying interest remained subdued as PVC producers become increasingly unwilling to run plants due to continued declined demand. Prices of caustic soda were witnessed to be trending higher, particularly on the export market pushing some producers to increase the production of EDC and offload it to the spot market to make gains from the rising caustic soda demand. Several producers in the US continued to face challenges amid planned and unplanned outages due to adverse weather conditions in the country which had long lasting repercussions on the production capacities of the country limiting the capacity utilization.

Looking further, the prices of EDC are expected to show continued stability due to the continued supply constraints and various other factors influencing the demand and supply dynamics. The prices may fluctuate with the fluctuations in feedstock pricing and crude oil prices, as crude oil pricing directly influences the Ethylene market. The balanced supply and demand conditions supported the stability in the prices of EDC in the market amid supply constraints. The pricing of EDC can also be influenced by changing economic landscape in the USA market amid changes in interest rates by the Federal Reserve.