The Market Overview of Ethylene Oxide and its Growing Demand

This blog comprises the ethylene oxide definition, market drivers, production process, pricing trends, key players, and recent development.

Ethylene Oxide: Definition

Ethylene Oxide (C2H4O) is a compound having a wide range of applications, primarily in the production of other chemicals that are used in a variety of industries, including fabrics for clothing, carpets, upholstery, and pillows.

It is a poisonous gas that, when inhaled, can cause nausea, difficulty breathing, headaches, frostbite, stomach illness, weakness, drowsiness, eye and skin burns, and reproductive difficulties.

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It is a flammable gas with no colour and a pleasant odour at room temperature. It dissolves in water, acetone, ether, benzene, and alcohol. It has vapours that are heavier than air but have a lower density than water.

Market Drivers

Ethylene Oxide is in high demand in the chemical industry since it is used in large quantities to produce compounds such as ethylene glycol and antifreeze.

It is also used as a pesticide and a sterilising agent in small concentrations. It is employed as a fumigant in the agricultural sector and as a sterilant in medical equipment that sterilises medical equipment and supplies, hence boosting the market growth.

It is widely used in the industrial business to make items like solvents, detergents, textiles, medicine, adhesives, and polyurethane foam, among others. Furthermore, chemical derivatives are used in the manufacture of household cleansers as well as personal care goods such as shampoos and cosmetics.

Automotive, building, construction & architecture, hydraulic & brake fluid, carpet backing & furniture cushioning, lubricants, appliance insulation, safety glass and natural gas & oil sectors are some of the other industrial applications that are boosting market demand.

Production Process

• From Ethylene: The process of EO synthesis involves ethylene oxidation by mixing ethylene and oxygen in a reactor at severe temperatures of 200-300 °C. The gas is then cooled, and ethylene oxide is removed by scrubbing the gaseous mixture with water containing potassium carbonate (aqueous). Finally, Ethylene oxide is produced by desorption and filtration of the solution followed by final distillation.

Ethylene Oxide Market Players

• Shell Chemical Company (Royal Dutch Shell Plc)
• LyondellBasell Industries NV
• BASF SE
• Linde AG

Ethylene Oxide Price Trend

North America

Recently, the pricing trend for Ethylene Oxide revealed conflicting market sentiments. Prices have fallen after the EPA in the United States identified threats from commercial sterilisation facilities using Ethylene oxide, which has had a detrimental impact on demand for the product as well as consumption levels in downstream industries.

Later in the time, a trend shift was noticed in which expenses climbed due to an increase in production costs despite higher demand for feedstock Ethylene from Polyethylene makers.

Finally, prices fell due to a dip in the prices of upstream WTI Crude oil and natural gas as a result of lower demand from Chinese importers in the midst of mounting Covid instances.

APAC

Ethylene Oxide prices are now reflecting conflicting market sentiments in Asia. Costs initially exhibited stability and grew little due to decreasing supply of feedstock Ethylene in nations such as Japan due to plant closures as well as increasing inflation.

Later in the time frame, feedstock plants, including Idemitsu Kosan, with a capacity of 6,90,000/MT, started operations, and feedstock supply improved due to decreasing production costs. Near the end, expenses are lower in the Asia region due to producer destocking practises.

While in China, prices remained stable and changed somewhat due to currency devaluation caused by the economic slowdown.

Europe

Prices for ethylene oxide fluctuated in Europe. Prices initially fell due to a dip in consumption as well as high rates of production as a result of increased Ethylene feedstock availability and the resulting decrease in EO production costs.

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However, in the middle, costs began to move north due to rising costs of upstream Naphtha and Dutch TTF natural gas. Near the conclusion, EO prices fell precipitously, owing to weak offtakes as well as a drop in feedstock and production prices amid a drop in input costs.

Meanwhile, the sharp drop in freight rates has resulted in an increase in EO imports from Asia to European coastlines.

Recent Development:

• January 9, 2023: Sotera Health Company, the top mission-critical end-to-end sterilisation solutions and lab testing and advisory services global provider in the healthcare industry, announced that its subsidiaries have agreed to settle over 870 ethylene oxide ("EO") cases pending against Sterigenics in Circuit Court of Cook County and US District Court for the Northern District of Illinois. Sterigenic agreed to pay USD 408 million to settle all complaints without accepting culpability. This settlement will cover any claims relating to ethylene oxide emissions from the company's Willowbrook, Illinois operation. People filed complaints alleging personal difficulties such as disease and wrongful death. In September, a jury awarded USD 358.7 million to one plaintiff. The firm's parent business, Sotera Health, sought to fight the damage awards aggressively but ultimately settled.

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