Price trends
The epichlorohydrin market continued its upward trend this week. Data from the SunSirs monitoring and analysis system shows that as of September 11, the benchmark price for epichlorohydrin stood at 11,600 RMB/ton, marking a 3.57% increase since the beginning of the month. While price levels continued to rise, resistance from downstream buyers regarding high prices also intensified, resulting in a market dynamic characterized by a tug-of-war between upward price pressure and buyer pushback.
Factors influencing price:
Raw Materials: Cost support has strengthened significantly. Regarding propylene, synchronized price increases in crude oil and propylene have created robust cost support. Geopolitical tensions have driven up the prices of crude oil and propane; combined with reduced external sales volumes from key PDH (propane dehydrogenation) producers, cost support for propylene continues to intensify. As for glycerin, despite signs of softening in overseas market prices, domestic prices remain firm due to tight supply. With both raw materials rising in tandem, cost support for epichlorohydrin is notably strong. According to the SunSirs market analysis system, the benchmark price for propylene stood at 10,034.33 RMB/ton as of September 11—an increase of 11.77% compared to the beginning of the month (8,977.67 RMB/ton).
Supply side: Operating rates have rebounded, but the increase in volume remains limited. The average weekly capacity utilization rate for domestic epichlorohydrin stood at 45.34% this week, down 0.55 percentage points from the previous week. While Zibo Feiyuan's 100,000-ton/year glycerin-process unit restarted and ramped up production, and Binhua Group's unit resumed operations, the units at Shandong Minji and Hubei Minteng remained offline; consequently, the net result was a slight decrease in overall supply compared to the prior week. With industry operating rates remaining at relatively low levels and no significant supply-side pressure, prices are receiving a degree of support at the low end.
Demand side: Buying is limited to immediate needs, with caution regarding chasing higher prices. Downstream epoxy resin markets have seen price hikes driven by rising raw material costs, yet demand remains sluggish; manufacturers are facing significant losses and are primarily fulfilling existing orders. Operating rates for solid epoxy resin fell by 2 percentage points week-on-week to 40%, while those for liquid epoxy resin dipped slightly to 50%. Downstream acceptance of high-priced raw materials is limited, with procurement restricted to small, essential volumes, resulting in a subdued trading atmosphere.
Market Outlook
Analysts at SunSirs anticipate that the epichlorohydrin market will experience fluctuations with an upward bias in the short term, advising close attention to the pace of stock-building. Currently, cost-side factors continue to drive prices upward, and there is no significant pressure on the supply side; combined with the gradual release of downstream demand for pre-National Day stockpiling, these converging bullish factors suggest the market will remain firm in the near term. However, it is important to note that losses for the glycerin-based process have widened to 1,043 RMB/ton, and margins for the propylene-based process have also contracted, highlighting a significant imbalance in profit distribution across the industry chain. Should downstream resistance to high-priced raw materials intensify, the scope for further price increases may be constrained. The market is expected to see fluctuations with an upward bias next week, with a key focus on the actual pace at which pre-National Day stockpiling demand materializes.
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