Epichlorohydrin CAS NO. 106-89-8 – July Review and August Outlook

【Price Review】
The Epichlorohydrin market has been finding its bottom this month, with prices gradually increasing as the month-end approaches. As of the close on the 26th of this month, the mainstream reference price in East China averaged 1044.69 USD/ton, reflecting a 4.80% increase over last month’s average.

【Supply Side】
The estimated production of Epichlorohydrin this month is 86,600 tons, which is an increase of approximately 4.46% compared to last month.

【Demand Side】
Statistics indicate that the average operational load rate for downstream liquid epoxy resins was around 53% this month, while solid epoxy resins had an operational load rate of approximately 40%, resulting in a slight increase in consumption of Epichlorohydrin compared to last month.

【Market Forecast】
In the next three months, the domestic Epichlorohydrin market is expected to experience fluctuations after a period of lower levels, with a potential for a stepped increase later on.
The specific situation will depend on several factors: 1. Continued weak expectations for end-user demand. 2. Changes in the operational status of on-site facilities.

【Market Review of July Epichlorohydrin】
In the current month, the Epichlorohydrin market has shown an upward trajectory after hitting a low, with prices continuing to rise as the month-end approaches. Throughout the month, the cost of glycerin has increased, strengthening the raw material cost support for the glycerin-based method; propylene prices have also primarily risen. The rise in these two foundational raw materials has been the main driver behind the increasing price of Epichlorohydrin. In the latter half of the month, some factories in Shandong, Zhejiang, and Fujian have halted operations for maintenance, while others have been fulfilling a backlog of orders, resulting in no shipping pressure for these facilities. Thus, market supply has initially been ample, subsequently tightening. As month-end nears, news of factory maintenance has boosted market sentiment, and, backed by cost support, factories have raised new order quotes.

In the first half of 2024, the domestic Epichlorohydrin market is expected to exhibit a weak downward trend following a period of sideways consolidation. The market’s peak was observed in January, when the average daily price reached 1170.06 USD per ton. On one hand, the slight increase in glycerin prices has led to a marginal enhancement in cost support from the glycerin process. Conversely, part of the factories in Zhejiang and Shandong underwent maintenance at the beginning of January, while other facilities have been primarily delivering long-term and prior orders, resulting in relatively low spot inventories. In certain regions, due to factory maintenance or limited operational capacity, the spot supply has tightened. Under the influence of supply constraints and cost support, prices have fluctuated within a narrow range. From February to June, end-user demand in downstream epoxy resins has been lackluster, leading to poor sales volumes and elevated finished goods inventories, which have led to a weak demand scenario for raw Epichlorohydrin as it continues to see only essential purchases. Consequently, prices have gradually declined. In the first half of the year, the lowest price for Epichlorohydrin was recorded in June, with an average daily low of 991.76 USD per ton, marking a new low since 2019. As of June 26, the average price of Epichlorohydrin in the East China market stood at 1093.62 USD per ton, down 7.86% compared to the same period last year.

In July, the average operating load rate for downstream liquid epoxy resin was approximately 53%, while solid epoxy resin operated at around 40%. The consumption of epichlorohydrin increased slightly compared to the previous month. During this month, the price of the raw material bisphenol A initially stabilized before rising, and another raw material, epichlorohydrin, weakened and then saw a slight uptick. Overall, the cost of raw materials strengthened month-over-month, providing a certain degree of support for epoxy resin prices.