In January, the Chinese epichlorohydrin market showed a "first stable then rising, with the focus shifting upwards" trend

February 3 news

In January 2026, the Chinese epichlorohydrin (ECH) market as a whole showed a trend of "initial stability followed by an upward shift in focus." At the beginning of the month, the market was stagnant due to the expectation of increased supply and the bearish sentiment of downstream players, with limited price fluctuation. In the middle to late part of the month, the market broke the deadlock under the influence of multiple factors, leading to a round of counter-trend price increases. The average price in the East China market rose from 11,925 CNY/ton on January 4th to around 12,600 CNY/ton at the end of the month, showing a significant price increase. According to the monitoring and analysis system, as of January 31st, the benchmark price for epichlorohydrin was 12,600 CNY/ton, an increase of 8.62% compared to the beginning of the month.

Price influencing factors:

Raw Materials Side: The price of glycerin raw material experienced a strong surge in January. As of January 21, the average price of 99.5% glycerin in the East China region reached 9,200 CNY per ton, up 550 CNY per ton from the end of December 2025—a monthly price increase of as much as 6.36%. The primary reason for this rise is the scarcity of spot inventories held by Chinese glycerin manufacturers, leading to tight market supply. Meanwhile, glycerin prices on the international market have also risen in tandem, climbing above US$1,150 per ton, thus creating a coordinated cost support both domestically and internationally. In January, the price of propylene raw material also showed volatile upward trends. The robust upward pressure on costs has become the key driving force behind the counter-trend rally in the epichlorohydrin market. According to market analysis systems, as of January 30, the benchmark price of propylene stood at 6,411.00 CNY per ton, representing a 12.13% increase compared to the beginning of the month (5,717.67 CNY per ton).

Supply side: The January supply increase was below expectations, with continued tightness in the spot market. Plant restarts were delayed and operating rates were reduced, and some factories cut production due to environmental control measures. Although some plants resumed operations, they mainly focused on fulfilling contract orders, leaving limited spot supply in the market. The industry's maintenance capacity for the month reached 838,000 tons, resulting in a loss of about 57,100 tons of production. Despite a slight increase in the capacity utilization rate and monthly output, the additional supply was absorbed by contracts and essential demand, failing to alleviate the tight spot market. The supply situation exhibited a characteristic of "nominal recovery, actual shortage," supporting price increases.

On the demand side: This month, downstream demand has shown a clear shift in response to price movements. In the first half of the month, due to bearish outlooks on future market conditions, expectations of increased raw material supply, and the fact that the epoxy resins market is in its off-season, downstream buyers adopted a cautious approach, focusing primarily on liquidating existing inventories and resulting in sluggish trading activity. As the mid-to-late part of the month approached the Spring Festival, downstream companies stepped up their procurement efforts to ensure production continuity during the holiday period, leading to a concentrated surge in rigid inventory demand. Meanwhile, the price of glycerol—the key raw material—rose sharply, sparking concerns about rising costs and further fueling the "buy-on-rise" sentiment for restocking. The sudden, concentrated surge in demand coincided with persistently tight spot supply, exacerbating the supply-demand contradiction and directly and powerfully driving up prices.

Market Outlook: Epoxy chloropropane analysts believe that strong glycerin costs provide a price floor support and an upward push, with downstream "buying on the rise" inventory replenishment sentiments bursting. Supported by high and firm costs and a tight supply-demand balance, epoxy chloropropane prices are expected to maintain a relatively strong pattern that is more likely to rise than fall. More attention should be paid to the changes in raw material prices and market supply and demand.