Epichlorohydrin Market Faces Weekly Decline, Despite a Month-on-Month Surge

The Epichlorohydrin prices in China increased during October 2024 on the back of supply constraints due to the production shutdown at the Jiangsu Haixing Chemical plant. However, despite the production cut, the overall market enthusiasm remained lull which plunged the domestic prices of Epichlorohydrin in the late October 2024 post-National Day Holiday. While the early part of the month witnessed a significant price surge for Epichlorohydrin driven by supply constraints, the latter half experienced a correction due to easing supply pressures and subdued demand. The market's overall sentiment remained cautious, with participants adopting a wait-and-see approach.

The month began with a significant price surge triggered by scheduled maintenance at Jiangsu Haixing Chemical's 130,000 tons/year propylene-based Epichlorohydrin plant. This unexpected supply disruption, coupled with a robust third-quarter domestic price increase, propelled Epichlorohydrin prices to higher levels. Market participants were optimistic about a potential demand uptick during the upcoming festive season, further fueling the price rise during this timeframe. Henceforth, scheduled maintenance at key production facilities led to temporary supply shortages which led to an early October 2024 price surge in Epichlorohydrin.

While the maintenance-induced supply constraints exerted upward pressure on prices, the overall supply situation remained relatively stable, mitigating the impact of disruptions. The downstream epoxy resin market, a major consumer of Epichlorohydrin, operated at a capacity utilization rate exceeding 50%. However, inventory levels remained sufficient, and the terminal market exhibited a lackluster performance. The downstream construction sector's sluggish demand tempered the impact of the supply disruptions. Additionally, as the festive season concluded, the anticipated demand surge failed to materialize, leading to a decline in market enthusiasm. Cautious raw material procurement, limited new order follow-ups, and weak signing volumes characterized the downstream sentiment. The downstream epoxy resin market exhibited cautious buying behavior and weak order activity. Moreover, after the mid-autumn festival, the demand for downstream cement has remained persistently poor.

As the month progressed, the initial price momentum began to fade. The easing of supply constraints, coupled with subdued demand, resulted in a downward price correction in Epichlorohydrin prices. The market mood shifted to a wait-and-see approach, with limited trading activity and a lack of enthusiasm for new inquiries. Post-holiday season, supply pressures eased, dampening price upside which resulted in a late October weekly price correction.

As per ChemAnalyst, the Epichlorohydrin prices are expected to marginally decline in November 2024 on the back of a foreseen decline in the production costs. Sufficient inventory levels in the storage units might lead to a bearish market scenario for Epichlorohydrin.