SunSirs: ECH Market Has Skyrocketed, and It May Rise But Hardly Fall in the Short Term

Price trend

According to the data from SunSirs’ bulk list, as of the morning of September 17, the average price of ECH from ECH companies was 20,333.33 RMB/ton, an increase of 28.15% compared with Monday's price, an increase of 43.87% compared with the price on August 17, and an increase of 55.22% in a three-month cycle.

Analysis review

This week, the ECH market saw a strong rise. Recently, the price of raw material propylene has been raised, and the price of raw material glycerin is high, the market has been positively boosted by the cost side. Under the influence of "dual control", some devices have dropped loads and stopped, the overall operating rate of the market has declined, and the shortage of supply has increased. Coupled with the "double festival" approaching, there is a demand for stocking in the downstream, and the market quotation has risen sharply. As the price rises to a high level, the just-needed downstream passively follow up.

In terms of indexes, the ECH commodity index on September 16 was 143.60, which was the same as previous day, setting a new historical high in the cycle, and was an increase of 206.51% from the lowest point of 46.85 on September 07, 2016. (Note: Period refers to 2011-09-01 to present)

Upstream propylene, according to data from SunSirs’ bulk list, as of September 16, the reference price of propylene was 7,964.86 RMB/ton, which was a 3.59% increase compared with September 1 (7,688.55 RMB/ton).

Downstream epoxy resin, the market of liquid epoxy resin in East China market rose on September 16. The raw material ECH has risen, and the cost support has risen. Holders are firm in their offers, but the downstream is obviously resistant to high prices. The market trading atmosphere is light. The mainstream market price is around 36,500-37,000 RMB/ton.

Market outlook

The ECH analyst of SunSirs believes that the current cost support still exists, and there is a demand for stocking in the downstream, coupled with the intensified supply, multiple supports in the market appear. It is expected that in the short term, the market for ECH may easily rise but hardly fall. In the later period, attention should be paid to the operating rate of downstream epoxy resins.

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