May China’s Epoxy Resins Market Experiences a One-Way Downward Trend

May 29th, News

In May, China’s epoxy resin market experienced a sustained, one-way downward trend with no signs of rebound. Monitoring data showed that the average market price fell from 17,467 CNY/ton at the beginning of the month to 15,300 CNY/ton by the end of the month, representing an overall price decline of 12.4%. Price trends among sub-categories showed little divergence: liquid E-51 in East China saw a deeper price drop, falling by 2,850 CNY/ton during the month; solid epoxy resins from Huangshan also followed suit, declining in price. Market conditions across all regions nationwide weakened simultaneously, with regional price spreads remaining narrowly fluctuating. Coupled with weak overseas export orders, the market was dominated by price reductions aimed at facilitating sales, and there were no clear signals yet of a halt to the downward trend. Meanwhile, raw material prices continued to fall, leading to a collapse in cost support.

Two key raw materials have weakened simultaneously, completely losing cost support: Bisphenol A continues its previous downward trend, with ample spot supply and weak downstream demand; Epichlorohydrin follows the decline in upstream glycerol, with prices noticeably dropping within the month. As raw material costs continue to decrease, Chinese resin manufacturers have no basis for maintaining prices, and their factory quotes are adjusted downward in line with raw material costs. With high production facility operating rates, the market is oversupplied.

In May, the industry saw a concentrated restart of maintenance facilities, along with the introduction of some new production capacities, leading to a consistently high overall operating rate and ample spot supply in the market. Inventories of manufacturers and traders continued to accumulate, resulting in significant pressure to reduce inventory. Low-priced goods kept flowing into the market, forcing prices to continuously decline.

Downstream sectors are entering the traditional off-season, with extremely weak rigid demand. Industries such as coatings, flooring, electronic potting, and wind power composites are all in a consumption off-season. Terminal factories are operating at low levels, only maintaining small orders to meet rigid demand, with no concentrated stockpiling activities. Coupled with persistently weak demand from the real estate sector, the transmission of production costs for downstream products is not smooth, leading to continuously low procurement intentions from the terminal market. The demand side is unable to provide support for the market.

It is expected that in June, the downward trend of epoxy resins will slow down, with prices likely to bottom out at lower levels. For now, there is no significant opportunity for a sustained upward trend. On the positive side: In late June, downstream users will gradually begin stocking up ahead of the holidays, which could lead to a slight recovery in demand driven by immediate needs. Moreover, under continued low prices, some small- and medium-sized plants may be forced to reduce their output passively, easing supply pressure somewhat. On the negative side: Upstream raw materials still lack upward momentum, and the industry’s overcapacity situation is unlikely to reverse in the short term. Overall, the market will shift from a one-sided decline to narrow-range fluctuations at lower levels, making it difficult for prices to return to the highs seen at the beginning of May.