For the Quarter Ending December 2024
North America
Throughout Q4 2024, the Epichlorohydrin market in North America witnessed a significant uptrend in imported prices. In October, typhoon Bebinca disrupted the supply chain activity from China to the USA. Moreover, several ECH plant closures in China have led to a decline in the obtainability of available stocks. Additionally, the strike at the International Longshoreman's Association (ILA) ports and the devastation caused by the Hurricane disrupted the supply chain values. Moreover, the Federal Bank decided to cut the interest rate which boosted the demand and increased the consumer sentiments from the downstream construction sector.
Simultaneously, due to the rebound in the downstream construction sector, the sales volume of ECH surged in November. The Election uncertainty has increased consumer sentiments from the downstream paints and coating sector which created an upward pressure on the overall market.
Furthermore, the implementation of anti-dumping duties on Indian ECH imports compelled Chinese suppliers to increase their quoted prices in December as well. This increase, coupled with higher import costs, contributed to the upward pressure on ECH prices in the USA.
APAC
Throughout Q4 2024, the Epichlorohydrin market in Asia witnessed a significant incline in prices. During October 2024, the post-National Day holiday celebrated in Taiwan and China, consumer sentiments have increased from the downstream paints and coating sector in the Asian market which created an upward pressure on the ECH inquiries. Moreover, the continuous surge in the feedstock Propylene prices in October has increased the manufacturing costs of ECH during this timeframe. The imposition of anti-dumping duties during November 2024 on ECH imports from China, South Korea, and Thailand by the Indian government has had a profound impact on the global Epichlorohydrin market. The additional costs associated with the anti-dumping duties have been passed on to importers, leading to higher FOB prices for Epichlorohydrin from South Korea. The ECH prices in South Korea have continued to showcase a bullish trend during December 2024 despite the low demand from the downstream construction sector. The supply of Epichlorohydrin within the domestic market was tight due to several maintenance shutdowns which created a shortage of available spot goods.
Europe
Throughout Q4 2024, the Epichlorohydrin market in Europe experienced a profound decline in prices influenced by several significant factors. In October, a decline in the feedstock Propylene prices declined the manufacturing costs. Moreover, the resolution of a port strike eased supply pressures and reduced freight charges which made imported ECH prices lower. The low demand from the construction industry, driven by factors such as declining construction spending, sluggish housing demand, economic slowdown, and inflationary pressures, impacted ECH orders to remain low. The ECH prices in Europe including Germany have continued their downtrend during November 2024 amid a low performance in the downstream construction sector. The consumer sentiments remained lulled amid a surge in the inflation rate. Moreover, in December, European ECH markets continued to see quiet spot activity driven by a general slowdown ahead of the winter downturn which limited the need for goods from the downstream paints and coating industry. Henceforth, despite the increasing congestion due to the rail car front, the market continued to face downward pressure.
South America
The South American Epichlorohydrin market experienced a significant uptick in imported prices throughout the fourth quarter of 2024. In October, a confluence of events disrupted the global supply chain, driving prices higher. Firstly, Typhoon Bebinca severely disrupted supply chain activity from China to Brazil. Secondly, several ECH plant closures in China led to a decline in available stock, further tightening supply. Producers of goods observed an increase in delivery delays on the supply side, brought on by delayed international logistics, traffic at Asian ports, and distributor shortages of essential supplies. In November, the market witnessed a surge in ECH sales volume, driven by a rebound in the downstream construction sector which boosted consumer sentiment within the downstream paints and coatings sector, creating an upward pressure on overall market demand. However, the market dynamics shifted toward bearishness in December 2024 despite the increase in the feedstock Propylene prices. Moreover, the end-of-year destocking season has led several manufacturers to clear their inventory levels to avoid taxation which further eroded the market sentiments.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, the Epichlorohydrin market in North America witnessed a significant decline in prices. However, during July, rising production expenses, driven by increased raw material Propylene costs and logistical challenges, contributed to an upward pricing trajectory.
The pricing dynamics reversed in a backward direction in August due to an oversupply of Epichlorohydrin in the market, coupled with weakening demand from sectors like construction and coatings, which exerted downward pressure on prices during September 2024. Moreover, a brief Canadian rail lockout and the threat of an ILA port worker strike added to market uncertainty and decreased purchases. A slowing US job market, with weaker-than-expected job growth in August, indicates an economic slowdown.
In the USA specifically, the market experienced the most significant price fluctuations. The quarter saw a notable -2% decline from the previous quarter in 2024. Furthermore, there was a distinct -5% price variance between the first and second halves of the quarter. The quarter concluded with Epichlorohydrin priced at USD 2027/MT CFR New Jersey, reflecting the overall downward trajectory in pricing.
APAC
Throughout Q3 2024, the Epichlorohydrin market in Asia witnessed a significant incline in prices, followed by a downtrend. In July, the Epichlorohydrin prices declined due to low demand from the downstream paints and coating industries. Capacity utilization remained below half, and producers adopted a largely order-fulfillment approach, displaying a lack of urgency to adjust pricing. Moreover, several downstream epoxy resin buyers maintained a cautious stance, which contributed to a downward pricing trajectory. However, The ECH market in South Korea experienced a price increase during September due to supply disruptions. Longer delivery times hurt the South Korean market even though the rainfall has decreased resulting in an upward trajectory. These rising costs put pressure on manufacturers, forcing some to increase their prices. In late August, multiple production enterprises underwent equipment maintenance, resulting in a tight market supply. Henceforth, despite the reduced production costs, the ECH market witnessed price hikes primarily driven by supply chain disruptions. The quarter concluded with Epichlorohydrin priced at USD 1105/MT FOB, Busan, South Korea, reflecting the overall upward trajectory in pricing.
Europe
Throughout Q3 2024, the Epichlorohydrin market in Europe experienced a decline in prices influenced by several significant factors. However, during July, logistical issues, such as increased freight rates from Asia to Europe, added to the inflated costs, impacting overall market dynamics toward bullishness. Nevertheless, a notable factor was the persistent low demand from downstream industries, particularly in the construction and paints and coatings sectors. This subdued demand created a surplus in supply, leading to a price decrease during August 2024. A significant drop in new business indicates that weak demand circumstances were the main cause of the slump as declines in housing activity during September 2024. In the Netherlands specifically, the market saw the most significant price changes within the region. Compared to the previous quarter in 2024, there was a recorded -2% change, indicating a consistent decline. Moreover, the second half of the quarter saw a notable -4% drop compared to the first half. The quarter-ending price for Epichlorohydrin CFR Rotterdam in the Netherlands stood at USD 2139/MT, reflecting the overall negative and decreasing sentiment in the pricing environment.
South America
Amidst a challenging quarter for Epichlorohydrin in South America, market prices have witnessed a significant decline. However, in July, growing manufacturing costs, caused by higher prices for the feedstock propylene and logistical difficulties pushed the prices upward. Nevertheless, due to an excess of epichlorohydrin in the market and declining demand from industries including coatings and construction, pricing dynamics reverted to a downward trajectory in August, which continued into September 2024. These factors have created a negative pricing environment, impacting market sentiment across the region. In the case of Brazil, which experienced the most significant price changes, the Epichlorohydrin market has been marked by, a -1% decline from the previous quarter in 2024 further underscoring the challenging market conditions. Notably, the second half of the quarter recorded a substantial -5% price difference compared to the first half, indicating a deepening of the downward trend. As the quarter drew to a close, Epichlorohydrin prices in Brazil stood at USD 2551/MT, signaling a continued negative trajectory in pricing dynamics.
For the Quarter Ending June 2024
North America
In North America, the second quarter of 2024 has seen an overall positive sentiment in the Epichlorohydrin (ECH) market, driven primarily by logistical challenges. Despite the low demand from the downstream construction industry, the price trend of ECH remained at a higher end due to extended delivery times from China to the USA.
The supply chain disruptions, including prolonged shipment delays and port congestion, have significantly impacted the availability of ECH, pushing prices upward. The early arrival of the ocean peak season and diversions in the Red Sea have exacerbated these logistical issues, leading to inflated transportation costs and a subsequent rise in ECH prices. Additionally, a surge in freight rates, particularly from Asia to North America, has contributed to the upward pressure on prices. Despite a generally sluggish demand from key downstream industries such as construction, the anticipation of the hurricane season has led to increased stockpiling, further bolstering prices.
Focusing on the USA, price changes from the previous quarter in 2024 have recorded a robust 5% increase, reinforcing an overall bullish trend. The quarter ended with the price of ECH at USD 2180/MT CFR New Jersey, reflecting a positive pricing environment dominated by supply chain challenges and strategic stockpiling activities.
APAC
In the second quarter of 2024, the Epichlorohydrin (ECH) market in the APAC region experienced a pronounced downturn. Key factors influencing this decline include subdued downstream demand, particularly from the epoxy resin and construction sectors, and an oversupply of ECH due to continued high production rates despite weak market absorption. Moreover, fluctuations in upstream raw material costs, such as propylene and glycerol, have offered minimal upward support. The stagnant economic performance in the region and cautious procurement strategies have further exacerbated the price drop. South Korea has seen the most significant price reductions. The ECH market in South Korea demonstrated notable seasonal weakness, with a marked drop in demand amidst a low procurement environment in the construction industry. This seasonal slump, combined with operational constraints and production halts due to subdued demand from the construction sector, resulted in a sharp price decline. Compared to the same quarter last year, prices fell by 17%, reflecting the overall bearish sentiment. The quarter concluded with ECH prices at USD 1030/MT FOB Busan, South Korea.
Europe
Epichlorohydrin (ECH) pricing in the Europe region for Q2 2024 witnessed a marked decline, driven by several influential factors impacting market dynamics. The quarter was characterized by subdued demand from the downstream construction industry, compounded by lingering economic uncertainties and high-interest rates. This reduction in demand was further exacerbated by increased freight rates due to logistical challenges and port congestion, particularly from Asian suppliers. The Eurozone's broader economic slowdown also played a significant role, with high inflation rates eroding consumer purchasing power and diminishing new construction orders, a primary application for ECH. Additionally, the ongoing geopolitical tensions in Ukraine added a layer of uncertainty, deterring investments in new projects and further dampening ECH demand. However, the logistical issues have slightly raised the prices of ECH during June 2024, while the overall trend remained muted due to subdued inquiries from the downstream sector. Focusing on Germany, where the price changes were most pronounced, the overall trends indicated a persistent downward trajectory. The quarter ended with ECH priced at USD 2221/MT FOB Hamburg in Germany, reflecting a negative pricing environment.
South America
In Q2 2024, the Epichlorohydrin market in South America witnessed a significant uptrend in prices driven by a confluence of key factors. This upward trajectory was notably influenced by a combination of factors such as rising freight costs, supply chain disruptions, and increased demand from various downstream industries. When focusing on Brazil specifically, the price fluctuations have been the most pronounced. The country experienced a substantial 6.7% increase in prices compared to the previous quarter in 2024. High-priced propylene in Brazil, a key raw material for ECH production, kept manufacturing costs on the higher end during May 2024. Despite the low demand for ECH from the downstream epoxy resin market, the prices experienced an upward trajectory. This surge during June 2024 was attributed to the early arrival of ocean peak season combined with Red Sea diversions were putting a strain on capacity and scheduling resulting in increasing traffic and a shortage of equipment which increased the freight charges. Throughout the quarter, there has been a noticeable correlation between price changes and market dynamics in Brazil. The quarter concluded with Epichlorohydrin priced at USD 2726/MT CFR Santos in Brazil, reflecting a persistently increasing pricing environment driven by a combination of internal and external factors.
For the Quarter Ending March 2024
North America
The Epichlorohydrin market in North America remained bullish during Q1 2024, following a period of low demand in Q4 2023. The market was influenced by expensive imports and moderate buying activity from the construction industry.
The limited supply of Epichlorohydrin on the spot market, caused by significant price increases for propylene, led to cost-driven price rises. This surge in production costs, coupled with low utilization rates in China, further intensified price pressures. In the USA, manufacturers prioritized fulfilling existing contracts, leading to a stabilized spot supply and trading atmosphere. However, there was a brief disruption in the form of a plant shutdown at the Olin Corporation plant in Freeport, Texas, due to freezing weather on January 17, 2024. Operations resumed on January 24, 2024, and the impact on the market was short-term.
Due to the Lunar New Year holiday in China and the consequences of logistical transportation, the market was in a wait-and-see mode during February, and henceforth, the offered quotations from China to the USA marginally elevated during this timeframe.
APAC
During the first quarter of 2024, the Epichlorohydrin (ECH) market in the APAC region underwent declining trend that impacted prices. One notable factor was the continued low global demand for ECH, which put strain on supply chains and resulted in price decreases. The market also saw supported availability of spot flow, particularly from China, where prices remained low, contributing to the overall downward price trend. Another influential factor was the stable manufacturing landscape in the region, with production levels remaining consistent and new orders experiencing minimal decline. Moreover, South Korea faced challenges in meeting overseas competition, leading to ample inventories and a loose supply situation. Despite the high price of feedstock Propylene during February, the supplies for ECH remained ample enough in the South Korean market due to subdued orders from the downstream industry. Furthermore, the Spring Festival Holidays have exacerbated the operations of the market. As per the Korean Statistical Information Service (KOSIS) data, the overall number of building licenses issued decreased by 25.3% in 2023, while the total gross floor area for which permits were issued decreased by 25.6%.
Europe
In the first quarter of 2024, the European region experienced significant shifts in Epichlorohydrin pricing toward bearishness. One key factor affecting Epichlorohydrin pricing was the state of the downstream construction sector. Demand from this industry declined, leading to a decrease in orders and exports. This decline was further exacerbated by rising interest rates, high unemployment, and strikes, all of which contributed to a drop in overall economic growth. Another factor impacting pricing was the global price of feedstock Propylene, a crucial ingredient in Epichlorohydrin production. The price of Propylene followed a downward trend, resulting in lower production costs for Epichlorohydrin. Additionally, persistent inflationary pressures across Europe tightened consumer wallets and curbed purchasing power, further dampening demand for Epichlorohydrin. This, in turn, influenced pricing dynamics in the market. In Germany, the largest market for Epichlorohydrin in the region, the price trend mirrored the overall market pattern. The country experienced a decline in demand from the construction sector, leading to production cuts and price drops for Epichlorohydrin.
South America
Epichlorohydrin pricing in the South American region during the first quarter of 2024 remained bullish when compared with the previous one. This incline was maintained by the tightened import of products from overseas, particularly from Asia, which is a major supplier to the region. The uptick was attributed to the influx of expensive imports from the Asian market. For cargo shipped in 20' and 40' dry containers, including High Cube equipment and 40' non-operative reefers, the General Rate Increase (GRI) from Asia to Latin America has increased to USD 1000 during January 2024. Downstream Epoxy Resin stockpiles were strategically filled before the holidays to meet the anticipated high demand which eventually surged the demand for ECH during February. Conversely, the Brazilian ECH industry's capacity utilization rate has been low recently which has affected the domestically produced ECH to meet the combined demands of the import price rise and the domestic construction boom. Adding fuel to the fire was the parallel rise in the price of Propylene, a key feedstock for ECH production. This increase has further inflated production costs, leading to a domino effect on the final price of ECH in March.
