The US Epichlorohydrin (ECH) market experienced a significant price decline in September 2024, primarily due to a cheaper freight rate, weakening demand in the downstream construction industry, and rising input costs. Not only the import prices, but the domestic market has also faced these challenges which created a bearish environment for US domestic Epichlorohydrin producers to revise their offered quotations negatively during September 2024 amid the risk of losing market share.

During September 2024, the Epichlorohydrin market in the USA witnessed a downtrend followed by August. One of the most significant contributors to the price drop was the influx of competitively priced Epichlorohydrin imports from China amid reduced freight rates from Asia to the US. This intensified price competition in the US market, putting immense pressure on domestic producers to lower their prices to settle at USD 2027/MT, Epichlorohydrin CFR, New Jersey, USA with a monthly drop of 3.7% during September 2024. Global factors also contributed to the decline in Epichlorohydrin prices. A softening of global demand for Epichlorohydrin, driven by lower demand from Asian markets and increased shipping capacity, resulted in subdued market sentiments.

Moreover, the weakening demand in the US construction industry, particularly in the housing sector, also played a crucial role in the decline of Epichlorohydrin prices. A challenging lending environment for construction projects, coupled with continued weakness in commercial property values, hindered inquiries and construction activity, leading to reduced demand for Epichlorohydrin. The slowing US job market, with weaker-than-expected job growth in August, indicated a potential economic slowdown. This added to the overall uncertainty in the market and further dampened demand for Epichlorohydrin. Furthermore, a brief Canadian rail lockout and the threat of an ILA port worker strike added to market uncertainty and decreased purchases. Escalating input costs, such as energy and raw materials, further exacerbated the challenges faced by US Epichlorohydrin producers. These rising costs reduced profit margins, forcing producers to either absorb the costs or pass them on to consumers, which could lead to higher prices and reduced demand.

As per ChemAnalyst, the Epichlorohydrin prices are expected to showcase a minor surge during October 2024 on the back of logistical difficulties. The extended ILA strike on the Gulf and East Coast would effectively paralyze some ports which could increase the freight charges during this timeframe. Some shipments may be redirected or moved to West Coast services, but many will remain stranded on the East Coast and Gulf until operations resume.