Ethylene carbonate

Ethylene Carbonate Market Intelligence Report

I. Price Trends
- Domestic Market: Recently, domestic ethylene carbonate prices have shown narrow fluctuations. The mainstream transaction price range is 12,000–13,500 CNY/ton. Some high-end quotes have slightly increased due to supply tightness, but the overall price increase remains limited.
- International Market: International prices are influenced by crude oil volatility and regional supply-demand differences. The FOB China main port price is 1,600–1,800 USD/ton. The price differential with the domestic market remains stable, with export orders primarily based on long-term contracts.

II. Supply and Demand Dynamics
- Supply Side:
- Domestic capacity utilization is approximately 75%. Some enterprises have reduced production due to environmental restrictions or equipment maintenance, resulting in tight supply in the East and South China regions.
- The commissioning of new capacity has been delayed. A 20,000 tons/year unit originally scheduled for Q3 has been postponed to Q4, limiting short-term supply increments.
- Demand Side:
- Demand from the lithium battery electrolyte industry accounts for over 60%. Downstream operating rates remain high, but procurement pace has become cautious due to the slowdown in end-user new energy vehicle sales growth.
- Demand from traditional industries such as coatings and adhesives remains stable but accounts for a small proportion, providing limited price support.

III. Cost and Profit
- Raw Material Costs: Ethylene oxide prices have remained weak and stable, alleviating cost-side pressure. However, profit margins for ethylene carbonate producers remain compressed, with some companies optimizing processes to reduce costs.
- Profit Levels: The industry average gross margin is approximately 15–20%, down 5 percentage points year-on-year. Small and medium-sized enterprises face increased profitability pressure.

IV. Inventory and Logistics
- Inventory: Upstream manufacturer inventories are at low levels, while trader inventories are neutral. Total social inventory is approximately 12,000 tons, at a low level for the same period in recent years.
- Logistics: In East China, typhoons have caused delays in port loading and unloading, but this has not significantly impacted overall supply.

V. Relevant Policies and Industry Developments
- Policy: National support policies for the new energy industry continue, but subsidy phase-outs have slowed end-user demand growth, indirectly affecting ethylene carbonate demand expectations.
- Industry: Leading enterprises are reducing costs through vertical integration (e.g., building their own ethylene oxide units), further increasing industry concentration.

Analysis and Judgment
1. Short-term (1–2 weeks): Prices are supported by tight supply, but cautious procurement on the demand side limits upside potential. Prices are expected to remain in a narrow range, fluctuating between 12,500–13,500 CNY/ton.
2. Medium-term (1–3 months): Until new capacity is commissioned, the tight supply situation is unlikely to change. If downstream electrolyte enterprises release inventory replenishment demand, prices may slightly rise to around 14,000 CNY/ton.
3. Long-term (3–6 months): Attention should be paid to new energy vehicle sales data and ethylene oxide price trends. If end-user demand remains weak, prices may face downward pressure.

Forecast
- Price Range: The average price for Q4 is expected to be 13,000–14,000 CNY/ton, with a potential peak in November (the traditional stockpiling period).
- Risk Factors: Significant crude oil price volatility, supply disruptions due to tightened environmental policies, and the transmission of overcapacity from the downstream electrolyte industry.