Epichlorohydrin Market to Witness Further Growth in the U.S.

Epichlorohydrin (Epi), which is used as an industrial raw material in epoxy resins, is widely applied in the construction, transportation, and electronics fields. Increasing demand for Epichlorohydrin from end-use industries and growing demand for industry products have led to the growth of the Epichlorohydrin market in the U.S. over the past four weeks.

Weaker economic conditions present headwinds that threaten continued robust growth going forward as well as possible constraints on raw material availability impacting prices down the line. The availability of propylene largely drives the production of Epichlorohydrin, and there are growing concerns over the supply of this commodity. There is significant uncertainty surrounding the stability of propylene supplies, but given the relative abundance and diversity in supplies for crude oil, propane, and butadiene, producers should be able to meet current demand levels.

Rising production costs are also putting pressure on profit margins and may cause to decrease in the near term. Low crude oil prices have helped lower feedstock costs, allowing for higher profitability and supporting Epichlorohydrin markets over time. Future trends in raw material and chemical prices will depend on what is happening in relation to crude oil as well as other commodity pricing dynamics.

High feedstock costs have already resulted in a price hike for Epichlorohydrin, which has, in turn, prompted a reduction in demand. This situation may reverse if crude oil prices fall. Demand is expected to remain strong over the upcoming year (2023), with growth primarily driven by the rising production of plastics and other epoxy resins.

The Epichlorohydrin market is set to continue growing in the U.S. as demand for epoxy resins increases. Epoxy resins are used mainly for high-performance coatings, adhesives, and sealants. Demand for these products has grown because of a recent surge in housing construction and commercial development projects.

The use of epoxy resin has been on the rise due to its versatility, durability, ease of application, and rapid drying. Another factor that will support the growth in this market segment is the increased usage of bisphenol A (BPA) free epoxy resins. The increase in demand for epoxy resins will lead to higher consumption of Epichlorohydrin. In turn, this will boost the size of the market further.

As on 18^th November 2022, the cost of Epichlorohydrin stood at USD 3,090 per MT on CFR-New Jersey basis.