In the last two weeks of November 2024, Ethylene Oxide prices in the United States showed signs of recovery, despite a range of challenges and developments. After a period of decline earlier in the months, Ethylene Oxide prices remained unchanged in the initial weeks of November, reflecting a balance in the supply and demand dynamics within the market. This stability was quoted to be supported by a moderate rebound in the broader chemical market, driven by the recovery of investments and manufacturing activities, particularly in the electric vehicle (EV) segment. While sentiment in many parts of Asia and Europe remained depressed, the US market-maintained resilience, with positive market outlooks underpinning the price stagnation.

The primary key factors influencing the initial stability and then inclination in Ethylene Oxide prices was the absence of significant disruptions in production and even paced downstream demand from industries such as ethylene glycol, turning the overall sentiments of Ethylene Oxide market positive. On the other hand, the strong rebound in the US dollar during October and through majority of November, following a challenging September, also played a role in supporting market movements. The favourable currency movement helped stabilize the market, particularly in the context of increased cash flow in the EV battery sector. The accelerating industrial pace, thus had a positive effect on the demand for Ethylene Oxide, contributing to the northward movement of prices in the latter half of November.

However, just as the market showed signs of cautious optimism, an unplanned shutdown at the INEOS Oxide Ethylene Oxide unit in Bayport, Texas, on November 27, 2024, added a layer of uncertainty. The shutdown, caused by technical issues with a steam supplier, could potentially disrupt the supply of Ethylene Oxide in the short term. The Bayport facility is one of the key Ethylene Oxide production plants in the region, and any extended downtime could create supply tightness, putting upward pressure on prices.

While the exact duration of the shutdown has not yet been confirmed, market participants are closely monitoring the situation, especially given that the Bayport plant plays a significant role in US Ethylene Oxide production. If the shutdown extends beyond a short period, it could lead to tighter supply, particularly in the domestic market, where inventory levels are already being managed carefully. Any extended disruption in Bayport’s production could lead to increased competition for available Ethylene Oxide supplies, which may prompt price hikes in the short to medium term.

Hence, looking ahead, the future outlook for Ethylene Oxide prices remains cautiously optimistic. The US market is expected to benefit from the continued growth in the glycols and automotive sectors, which will likely drive increased demand for Ethylene Oxide and its downstream products. Moreover, if the shutdown at the Bayport plant persists for an extended period, the market could experience stronger demand moving into December and into the new year.