SunSir: ECH Market Declined in the First Half of 2023

Price trend

In the first half of 2023, the market of ECH declined. According to the commodity market analysis system of SunSirs, the average price of ECH of enterprises was 9,100.00 RMB/ton on January 1, 2023, and the average price of ECH enterprises was 7,575.00 RMB/ton as of June 30. The market fell by 16.76% in half a year.

Analysis review

In the first quarter of 2023, the overall trend of ECH market declined. In January, the spot supply in the Jiangsu and Shandong markets was tight, and companies had a mentality of supporting prices. Before and after the Spring Festival, the market remained light and stable, and the quotations of companies were mainly stable with small fluctuations. In February, there was significant cost support, but downstream demand was weak. Only small orders were purchased in needed, and factory shipments were under pressure. Accumulated inventory increased, and the supply and demand side dragged down the market. In March, the cost support remained. Some ECH units were shut down or operated at reduced load, but the demand support was weak. The downstream mainly consumed inventory raw materials, the market mentality was under pressure, and the focus of ECH negotiations was weaker.

In the second quarter of 2023, the ECH market rose first and then fell. In early April, some units were shut down, the spot supply of the market was tight, and the downstream market inquiries increased, supporting the rise of the ECH market. In the middle to late April, with the restart of some units in succession, the market supply increased, the demand side dominated the market trend, and the ECH market fluctuated upward. In May, the production capacity utilization rate at the supply end remained low, but the demand follow-up was limited. Downstream, there was a high consumption of inventory raw materials, and there was mainly a demand for moderate replenishment on dips. The market trading atmosphere was light, and the market was weak. In June, the demand side dominated the market, the main downstream epoxy resin was weak, mainly consumed contract volume and inventory, and the enthusiasm for market inquiry was not high, just followed with small orders, the market transaction continued to be under pressure, and the holders shipped at discount. Under the drag of demand, the focus of ECH market negotiation continued to decline.

Upstream and downstream: upstream propylene. According to the commodity market analysis system of SunSirs, as of June 30, the average spot price of domestic propylene was 6,518.25 RMB/ton, down 10.03% from 7,244.60 RMB/ton at the beginning of the year, and the cost support for ECH market was weak. The downstream epoxy resin, according to the commodity market analysis system of SunSirs, the reference price of the epoxy resin was 12,533.33 RMB/ton on June 30, a decrease of 20.84% compared with January 1 (15,833.33 RMB/ton), which was insufficient to support the ECH market.

Market outlook

After the weak consolidation of the market in July, the factory production and marketing have no pressure to support the market's price mentality. At present, the cost side has some support, but the demand side performance is average. It is expected that the ECH market will be consolidated in a range in the short term, and more attention should be paid to the market news guidance.

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