China's Epichlorohydrin Market Supply and Demand Imbalance, Prices Falling

May 29th News

This week, the Chinese epichlorohydrin (ECH) market continued its deep downward trend, with prices continuing to fall. According to the monitoring and analysis system, as of May 29, the benchmark price for epichlorohydrin was 11,400 CNY per ton, a decrease of -12.31% compared to the beginning of the month.

Price influencing factors:

Raw Material Side: Due to volatile and weakening international oil prices, naphtha prices have declined, and the price center of propylene—the key raw material—has shifted downward, leaving the overall market in a phase of high-level fluctuations. The glycerol market continues to show weak downward trends with sluggish trading activity. In East China, the mainstream spot price for industrial-grade 99.5% glycerol has fallen to between 9,300 and 9,500 CNY per ton, representing a cumulative price decrease of over 10% since the end of April and clearly indicating a downward trend. Overall, the cost support for epichlorohydrin remains weak, and its prices continue to decline. According to market analysis systems, as of May 29, the benchmark price for propylene stood at 9,051.00 CNY per ton, down 4.67% from the beginning of the month (9,494.33 CNY per ton).

Supply side: The overall supply of epichlorohydrin in China is relatively loose. By mid-May, the main maintenance work had gradually ended, and by May 28, the industry's operating rate had risen to 65%–70% (an increase of 10 percentage points from early May). Due to the sharp decline in glycerol prices, the losses from the glycerol-based process have narrowed, leading to the restart of small and medium-sized plants, resulting in a significant increase in supply.

On the demand side: Downstream demand remains sluggish, with sluggish shipments at the end-user level and a strong bearish sentiment prevailing in the market. Traditional consumer sectors such as coatings, electronics and electrical equipment, and composite materials continue to languish. Coupled with end-users’ wait-and-see attitude—preferring to buy when prices rise rather than fall—during this price-decline cycle, the pace of market procurement has noticeably slowed down.

Market Forecast: According to epoxy chloropropane analysts, the epoxy chloropropane market is caught in a triple bearish scenario characterized by “collapsing raw material prices, shrinking demand, and oversupply.” In the short term, as costs remain weak and there are no clear signs of a recovery in downstream demand, the epoxy chloropropane market is likely to continue its weak and consolidating trend. Further attention will still be needed on raw material prices and changes in market supply and demand.