Ethylene Oxide Market Overview and Key Drivers
Ethylene Oxide (C2H4O) is a compound with a massive range of uses, mainly for creating other chemicals that have further employment across different industries, including fabrics for clothes, carpets, upholstery, and pillows. Characteristically, it is a toxic gas that can cause adverse medical conditions upon exposure, i.e., nausea, trouble breathing, headaches, frostbite, stomach sickness, weakness, drowsiness, eye and skin burns, along with reproductive issues. At room temperature, it is a combustible gas that has no color but a sweet smell. It is miscible in water and in acetone, ether, benzene, and alcohol. It has vapors heavier than air and lower density compared to water.
Ethylene Oxide has considerable demand across the chemical industry since it is employed in huge volumes for producing chemicals like ethylene glycol and antifreeze. Furthermore, in small quantities, it finds use as a pesticide and sterilizing agent. In the agricultural sector, it is used as a fumigant and as a sterilant in medical equipment sterilizes medical equipment and supplies, bolstering the market’s expansion. In the manufacturing industry, it has extensive usage for making products like solvents, detergents, textiles, medicine, adhesives, and polyurethane foam, among others. Additionally, chemical derivatives are employed in the production of domestic cleaners and personal care products such as shampoos and cosmetics. Other industrial applications fostering the market demand are in the automotive, building, construction & architectural, hydraulic & brake fluid, carpet backing & furniture cushioning, lubricants, appliance insulation, safety glass, and natural gas & oil industries.
Ethylene Oxide Production Cost Analysis
- From Ethylene: The method of EO production employs ethylene’s oxidation by combining ethylene and oxygen in a reactor at extreme temperatures of 200- 300 °C. The process is followed by the gas’s cooling and removal of ethylene oxide produced by the scrubbing of the gaseous mixture with water carried forward by potassium carbonate (aqueous). Finally, Ethylene oxide is derived via the solution’s desorption and filtration using final distillation.
Ethylene Oxide Market Players
- Shell Chemical Company (Royal Dutch Shell Plc)
- LyondellBasell Industries NV
- BASF SE
- Linde AG
Ethylene Oxide Price Trend Movements
North America
The pricing trend for Ethylene Oxide displayed mixed market sentiments recently. The prices declined since EPA in the USA specified the threats from commercial sterilisation facilities utilizing Ethylene oxide, which had a negative effect on the demand for the product along with the levels of consumption in the downstream industries. Later in the period, a shift in trend was observed where costs increased because of an increase in the cost of production amidst elevated demand for feedstock Ethylene from Polyethylene producers. In the end, prices dropped once again on the back of a decrease in the prices of upstream WTI Crude oil and natural gas as a consequence of reduced demand from Chinese importers in the middle of rising instances of COVID.
Asia
Currently, prices of Ethylene Oxide display mixed market sentiments in Asia. At first, costs displayed stability and increased on a marginal basis because of the lower availability of feedstock Ethylene in nations such as Japan due to closedowns of plants as well as soaring inflation. Later in the time frame, feedstock plants, including Idemitsu Kosan, with a 6,90,000/MT capacity, resumed operations, and availability of feedstock improved on the back of lower cost of production. Near the end, costs are lower in the Asia region amidst practices of destocking by producers. Whilst in China, costs stayed steady and shifted a little because of currency depreciation as a consequence of economic deceleration.
Europe
In Europe, prices of Ethylene Oxide wavered. At first, the prices dropped amidst the drop in consumption as well as strong rates of production as a result of the additional feedstock availability of Ethylene supplies and the consequential decrease in EO production costs. Yet, in the middle, costs started moving northwards because of risen costs of upstream Naphtha and Dutch TTF natural gas. Near the end, prices of EO dropped considerably, backed by frail offtakes along with a decline in prices of feedstock and production amidst a drop in costs of input. In the meantime, the steep decline in freight charges led to a rise in EO imports from Asia to European shores.
Recent Development in the Ethylene Oxide Industry
- Ethylene Oxide Litigation Settlement in Illinois Announced by Sotera Health
January 09, 2023- The top mission-critical end-to-end sterilization solutions and lab testing and advisory services global provider in the healthcare industry, Sotera Health Company (Nasdaq: SHC), declared that its subsidiaries have agreed to make a settlement of over 870 ethylene oxide (“EO”) cases that were pending unresolved against Sterigenics in Circuit Court of Cook County, and US District Court for the Northern District of Illinois.
Sterigenic settled on paying USD 408 million to settle all the cases without taking liability. This settlement will cover any claim linked with the alleged emissions of ethylene oxide from the firm’s plant in Willowbrook, Illinois. The complaints by people included claims of alleged personal issues like cancer and wrongful death.
A jury, in September, granted one plaintiff USD 358.7 million. The firm’s parent company Sotera Health decided to aggressively counter the damage awards however decided on a settlement.
As per the well-studied blog on Ethylene Oxide, the key market leaders and fellow leaders can expect to gain an overall market insight into the product. The product’s key market elements have been researched, including its main drivers, end-user industries, production processes, market leaders, and pricing trajectory paired with prominent developments in the sector. From the write-up, the readers are expected to take away some basic understanding of how the market operates, the competitive landscape, and supply-demand analysis, which can help them with their procurement strategies and business planning.
