The prices of ECH in China have started to decline as March 2025 begins due to negative downstream demand from the epoxy resin market. Previously, the supply of ECH was tight due to plant shutdowns at various units in China. However, following the restart of several ECH units, the supply pressure has begun to ease alleviating the pressure that had previously sustained elevated prices.

Key Takeaways:

• ECH prices in China started to decline following the restart of plant shutdowns.
• A decline in feedstock Propylene prices lowered the manufacturing costs.
• Terminal demand for ECH remained low due to the lull downstream epoxy resin industry.
• Traders have a passive purchasing mentality due to tariffs-trade uncertainty.

As per ChemAnalyst, the ECH prices are expected to further decline due to low demand from the downstream epoxy resin industry. Moreover, the US President imposed 10% tariffs on Chinese imports on February 1, 2025, and an additional 10% tariff on March 4, 2025. As a retaliatory action, China has also imposed an additional 15% tariff on the US which made the situation worsen. This trade uncertainty and global slump of consumers to procure goods could decline the ECH prices further.

As per the recent assessment, after witnessing the continued uptrend in February 2025, the ECH prices in China have started to decline as March begins and the prices have decreased by 2.4% till the third week of the month. This shift in market dynamics was marked by a previously observed tight situation which was characterized by dwindled inventory levels due to plant shutdowns. However, as March progressed, the supply situation began to ease following the restart of the ECH plant in China.

Furthermore, a continuous decline in the feedstock propylene prices was observed in China. This decline has lowered the manufacturing costs and provided downward support for ECH prices.

Contributing to the price decline was a notable weakening of consumer enthusiasm from the downstream epoxy resin market. The market sentiments were highlighted by a cautious approach and no new orders for ECH were registered during this period. The terminal demand was weak, and the downstream epoxy resin production capacity utilization was registered at 50%.

Moreover, demand for ECH from the downstream construction sector remained low in February 2025 as per Steel Union data, the Cement Price Index has declined from 348.4 points in January 2025 to 376.33 points in February 2025. Henceforth, the overall market reflected a bearish sentiment, indicating a lack of buying interest from the downstream terminal sector.