August Epichlorohydrin Market Shows a "V" Shaped Trend in China

August 29 update

In August, the epichlorohydrin market in China showed a "V" shaped trend, with the overall center of gravity shifting upward compared to July. According to the monitoring and analysis system, as of August 29, the benchmark price of epichlorohydrin was 11,600 CNY/ton, an increase of 1.75% from the beginning of the month.

Price influencing factors:

On the raw materials front: In the first half of the month, glycerin prices remained strong at high levels, while propylene experienced slight fluctuations, providing some support to the cost of epichlorohydrin—but this support was limited, leading to a downward price swing for epichlorohydrin. By the second half of the month, both glycerin and propylene continued to trade at elevated price levels, putting significant cost pressure on manufacturers. As a result, most companies followed suit by steadily raising their prices in response to rising production costs. According to market analysis systems, as of August 28, the benchmark price for propylene stood at 6,633.25 CNY per ton, representing a 3.11% increase compared to the beginning of the month (6,433.25 CNY per ton).

Supply side: In early August, the release of new production capacity in Shandong and the end of some plant maintenance led to an expected increase in market supply, with a more relaxed supply situation. The supply support for epichlorohydrin was insufficient, leading to a downward shift in price levels. In late August, some plant maintenance in Zhejiang and other regions tightened the spot supply in the market. Although there was an increase in new production capacity in Shandong and an increase in the volume of spot sales, the overall tight supply situation did not fully ease, causing the market price of epichlorohydrin to rebound from its bottom.

Demand side: In August, the capacity utilization rate of the downstream epoxy resins industry in China was about 50%. Downstream enterprises mainly conducted procurement based on rigid demand, with a generally moderate trading atmosphere and very few actual transactions. In late August, as the price of epichlorohydrin fell to its lowest point, some enterprises made small-scale purchases to fulfill previous contracts. However, after the price of epichlorohydrin rose to a high level, the downstream market showed weak acceptance of high prices, leading to poor sales for enterprises. Currently, transactions at high prices are sluggish, and the trading atmosphere is generally moderate. It is expected that the market price of epichlorohydrin will mainly remain stable in the later period.

Market Forecast: Epoxy Chloropropane analysts note that glycerol and propylene prices remain strong at high levels due to tight supply conditions, which have yet to fully ease. Overall, both the raw material and supply sides continue to provide some support to the epoxy chloropropane market. However, weak downstream demand and sluggish trading activity may limit further price increases. As a result, epoxy chloropropane prices are expected to stabilize in the near term, with ongoing attention still needed on raw material costs and shifts in market supply and demand dynamics.