Ethylene oxide: Cycles

Why steady contracts calm prices, except in China

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Purified EO is priced on cost-plus contracts in the US and Europe, so it is less volatile than MEG. Margins cycle with ethylene costs and with derivative demand, especially detergents and polyester. In China, EO is traded more actively and margins swing with MEG profitability, since producers can shift EO between glycols and merchant sales. The floor is the value of converting EO to MEG.

The spread to watch EO minus ethylene cost (China)

Argus calculates margins for non-integrated Chinese producers on domestic and imported ethylene: about -$14/t and -$12/t in early October 2025.

Booms and busts

2020
Covid demand for sterilisation and surfactants (detergents, sanitisers) rose while MEG collapsed. EO producers shifted output from glycols to purified EO.
not published (indicative: purified EO held up while MEG hit record lows)
2021-2022
Ethylene and energy price spikes raised European EO contracts sharply after the Russia-Ukraine war.
European EO contract above €1,800/t in 2022 (indicative)
2025
Chinese oversupply and weak ethanolamine margins; Chinese plants ran near 69%.
China EO ex-tank CNY 6,300/t (about $885/t); Europe €1,294/t; US 56.20 c/lb (Argus, Aug-Oct 2025)

What drives the cycle

Ethylene price. Most of EO cost; contracts pass it through.
MEG margin. Integrated producers choose between EO sales and glycols.
Detergent and surfactant demand. Ethoxylates are the main merchant EO outlet.
Sterilisation regulation. EPA and EU limits could cut EO demand in medical sterilisation.

Metrics to track

Metric	Why it matters	Where to track it
China EO ex-tank price and operating rate	Most liquid EO market	Argus, CCF, Mysteel
US and Europe EO contract prices	Contract benchmarks	Argus, ICIS
China EO margin	Shows marginal producer health	Argus