The US Epichlorohydrin (ECH) market witnessed a continued decline in prices during January 2025, primarily driven by a dampened demand from the downstream epoxy resin market and eased supply pressures. While rising feedstock costs posed a countervailing pressure, the combined impact of these factors ultimately led to a downward trajectory in ECH prices during this period.

Key Takeaways:

• The decline in the US ECH prices was attributed to low demand from the downstream epoxy resin market.
• Approaching the Spring Festival in China further eroded global ECH demand.
• Freight Rates from Asia to the US decline amid Agreement between ILA and USMX. 

The US ECH prices have continued to decline by 1.5% on 24th January 2025 due to a decline in demand from the epoxy resin market. This slowdown was evident in a deceleration of both new order intake and production growth, signaling a potential cooling of ECH market activity. As the Spring Festival drew closer in China, a noticeable slowdown in global market demand emerged. The overall sentiment surrounding new order transactions was notably subdued, lacking the usual enthusiasm for procuring ECH.

A notable decline in import orders further exacerbated the downward price pressure. This reduction in import volumes, driven by softening demand and increased supply, contributed to a decline in overall sales volumes and eroded market optimism. To maintain market share, Chinese ECH manufacturers resorted to offering significant discounts, further impacting import prices and exerting downward pressure on the overall US market.

Despite a concurrent rise in propylene feedstock costs, the US ECH market experienced a persistent downward trajectory due to an easing of the supply situation from China. Increased supply from Chinese producers, coupled with their competitive pricing strategies, exerted downward pressure on US market prices.

Freight rates on key Asia-US trade routes experienced further declines this week, mirroring a global trend of easing container shipping costs. Asia-US West Coast prices witnessed a significant 10% drop, while Asia-US East Coast rates dipped by 3%.

Furthermore, the recent tentative agreement reached between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) has averted a potential strike that threatened to disrupt operations at major US East and Gulf Coast ports which somewhat eased the potential supply chain disruption. Henceforth, the freight charges from Asia to the US market declined during January 2025 which made the imported ECH prices cheaper as compared to the previous month.

As per ChemAnalyst, the ECH prices in the USA could rebound in February 2024 amid the downstream construction industry may showcase bullishness which could lead to new orders in the ECH market.