SunSirs: Ethylene Oxide Prices Soared in March, Hitting a Nearly Four-Year High

Ethylene Oxide Prices Soared in March, Hitting a Nearly Four-Year High

In March 2026, the price of ethylene oxide surged significantly. According to data from SunSirs, as of March 31, the average price in the domestic ethylene oxide market stood at 8,800 RMB/ton—a 60% increase compared to the average market price of 5,500 RMB/ton recorded at the beginning of the month.

Market Analysis

On March 31, 2026, the domestic Ethylene Oxide (EO) market witnessed a sharp surge, with quoted prices across all regions climbing in unison—marking a concentrated and accelerated manifestation of the upward trend observed throughout the entire month of March. According to data from SunSirs on that day, the prevailing market price for EO in East China reached 8,800 RMB/ton, an increase of 300 RMB/ton over the previous day; similarly, the listed price in North China hit 8,800 RMB/ton, registering a substantial gain of 400 RMB/ton; in South China, the quoted price range stood between 8,700 and 8,800 RMB/ton, rising by 300 to 400 RMB/ton; meanwhile, Central China recorded the highest listed price at 8,950 RMB/ton—a rise of 300 RMB/ton. With significant gains observed across every region, EO prices were driven to a new four-year high. This sudden price surge was not a mere coincidence, but rather the result of a confluence and resonance of multiple factors—including costs, supply, demand, and market sentiment—among which the skyrocketing cost of upstream raw materials emerged as the primary driving force.

A rigid and sudden surge in input costs stands as the fundamental driver behind the recent substantial rise in ethylene oxide prices; this phenomenon stems primarily from the sustained upward trajectory of prices for upstream raw materials—ethylene and ethane. The recent escalation of geopolitical conflicts in the Middle East, coupled with uncertainties surrounding the situation in Iran, has disrupted shipping through the Strait of Hormuz—a critical "chokepoint" for the global transport of Middle Eastern crude oil. This disruption directly triggered violent fluctuations in international crude oil prices, with Brent crude briefly breaching the $108-per-barrel mark, while domestic crude oil futures prices mirrored this trend, oscillating upward in tandem. The soaring cost of crude oil has directly cascaded into the downstream chemical feedstock sector; as the primary raw material for ethylene oxide production, ethylene has witnessed an explosive surge in price. External market prices for ethylene in Northeast Asia climbed from approximately $800 per ton in early March to $1,050 per ton by March 31, while domestic spot prices for ethylene broke through the 7,700 RMB-per-ton threshold. Given that ethylene accounts for over 60% of the production costs for ethylene oxide, this rigid escalation in raw material prices has directly resulted in a significant increase in manufacturing costs for enterprises. As profit margins eroded and the pressure of financial losses intensified, producers collectively acted to raise prices around March 31, creating a market dynamic where price hikes were effectively "forced" by the overwhelming pressure of rising costs. Concurrently, the majority of domestic ethylene oxide production facilities rely on imported ethane; however, due to the geopolitical conflicts, both maritime freight rates and import tariffs have surged significantly, adding approximately 2,000 RMB to the cost of every ton of imported ethane. Consequently, numerous small and medium-sized manufacturers—facing a situation where production costs exceeded market selling prices—were compelled to cut production, thereby further exacerbating the already tight supply conditions within the market.

The persistent tightening on the supply side has provided significant support for price appreciation, as plant maintenance and reduced operating loads have resulted in a severe shortage of spot market resources. In March, the domestic market entered its routine maintenance season for ethylene oxide (EO) facilities; multiple units across various enterprises—including Satellite Chemical and Gulei Petrochemical—were successively shut down for scheduled repairs. Although Gulei Petrochemical completed its maintenance ahead of schedule and was technically ready to resume production, its output was insufficient to alleviate the market supply deficit in the short term. Furthermore, driven by shortages and high prices of ethylene feedstock, several EO units experienced unplanned shutdowns or operated at reduced loads. Concurrently, domestic cracking units also scaled back their operating rates, leading to a further contraction in ethylene supply; this directly constrained the production volume of EO and resulted in a substantial reduction in market circulation. As of March 31, spot inventories in the domestic EO market remained at low levels. Some manufacturers adopted strategies such as limiting order intake or halting sales to hoard stock, thereby artificially exacerbating market panic regarding the unavailability of goods and laying the groundwork for price hikes. It is worth noting that while the total domestic EO production capacity has exceeded 10 million tons, much of this newly added capacity is dedicated to meeting the downstream production requirements of the enterprises themselves; consequently, the volume of product released to the external commercial market remains limited. When faced with sudden surges in demand, the supply side struggles to respond rapidly, a factor that has further amplified the prevailing tightness in the supply landscape.

A wave of panic-driven inventory restocking—amplified by the simultaneous peak season across various demand sectors—generated a powerful upward momentum for prices. March marked the tail end of the infrastructure sector's "Golden March" peak season; the accelerated resumption of domestic real estate and infrastructure projects triggered a concentrated surge in demand for polycarboxylate superplasticizers (and their polyether monomers). As polycarboxylate superplasticizers constitute a core downstream application for ethylene oxide, this activity established a solid foundation of rigid demand. Concurrently, the rapid expansion of the new energy sector emerged as a new engine for ethylene oxide demand; the lithium-ion battery electrolyte solvent (EC/DMC) industry continued to scale up, driving a steady increase in the need for ethylene oxide and further bolstering the overall resilience of market demand. Crucially, inventory levels across the supply chain had previously been running low. Amid expectations of sustained price hikes for ethylene oxide throughout mid-to-late March, downstream enterprises engaged in panic-buying and inventory-stockpiling behaviors. This triggered a positive feedback loop—characterized by "price hikes leading to panic-buying, which in turn leads to further price hikes"—that reached its zenith on March 31st, directly propelling prices to skyrocket.

Market-side dominance by industry leaders, coupled with surging market sentiment, further amplified the impact of the recent price hikes. Industry giants—such as Sinopec, PetroChina, and AOC—who hold significant market pricing power, collectively implemented substantial increases to their listed prices for ethylene oxide on March 31. Driven by the dual pressures of rising costs and tight supply-demand dynamics, these firms raised prices by a cumulative total of over 2,600 RMB/ton during the month of March alone. Concurrently, some leading enterprises adopted measures such as suspending external price quotes and prioritizing supply for long-standing clients, thereby further exacerbating the atmosphere of tight market supply. Furthermore, market panic triggered by geopolitical conflicts converged with speculative capital flows; as investor expectations regarding rising ethylene oxide prices continued to intensify, the upward price momentum was further amplified, driving an accelerated surge in prices on March 31.

Market Outlook:

In summary, the sharp surge in ethylene oxide prices on March 31 represents a concentrated and accelerated realization of the industry trends observed throughout the entire month of March. The fundamental driving force behind this rise was the rigid upward pressure on costs resulting from soaring upstream ethylene and ethane prices. This factor was compounded by a confluence of other elements: spot market shortages caused by plant maintenance and reduced operating loads on the supply side; robust demand support stemming from the peak season for infrastructure projects and a surge in the new energy sector; and market manipulation by leading enterprises, further amplified by widespread panic among market participants. Collectively, these factors propelled ethylene oxide prices to a new four-year high. In the short term, influenced by persistently high raw material costs and tight supply conditions, ethylene oxide prices are expected to continue fluctuating at elevated levels. In the long term, however—should geopolitical tensions in the Middle East ease, ethylene prices retreat, or new production capacity gradually come online—prices may undergo a gradual correction; nevertheless, sustained firm demand from downstream sectors is expected to continue providing a certain level of price support.

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