Category

Countries

Epichlorohydrin Prices Slump Amidst International Market's Sluggish Demand
Epichlorohydrin Prices Slump Amidst International Market's Sluggish Demand

Epichlorohydrin Prices Slump Amidst International Market's Sluggish Demand

  • 23-Nov-2023 12:44 PM
  • Journalist: Bob Duffler

In the third week of November 2023, the Epichlorohydrin (ECH) market in the United States encountered a significant setback with a decline of approximately 2.5% in product prices. This downturn was primarily attributed to subdued demand, notably from the downstream construction sector. The weakened demand scenario found its roots in the escalating inflationary pressures prevailing within the country. The construction industry, a key consumer of ECH, demonstrated reluctance in procurement amid economic uncertainties, contributing to the overall price decline.

Contrastingly, the international market for ECH exhibited resilience during the same period, maintaining steadfast prices despite the challenging global economic landscape. This divergence highlighted the complex interplay between domestic and global factors influencing ECH dynamics.

Simultaneously, the Chinese ECH market experienced relative stability, albeit with a slight price decline. The reduction in the utilization rate of production capacity played a pivotal role in creating a sustained tight supply scenario, providing some support to the market. However, downstream participants were cautious, especially in the epoxy resin sector. They awaited more favorable pricing conditions while closely monitoring the sluggish demand dynamics within the market.

The epoxy resin sector, a primary consumer of ECH, has been grappling with weakened supply and demand trends since November, contributing to a continued downturn in the ECH market. The reluctance in the downstream epoxy resin market to make substantial purchases is primarily due to a dwindling supply of raw materials. This, coupled with a careful approach toward ECH inquiries, is based on stringent demand considerations.

In the preceding second week of November 2023, the U.S. and Chinese ECH markets experienced a roughly 3% price decline. The connection between these markets became evident as the U.S. market mirrored the trends in China, a significant source of ECH imports. China faced challenges with a weakened utilization rate of ECH production capacity and the imminent introduction of new production capacity, limiting support on the supply side.

The overall market dynamics reflected a delicate balance influenced by supply-side factors and hesitant demand patterns. The interconnectedness of the U.S. and Chinese markets underscored the challenges faced by the ECH industry in navigating a complex economic landscape, emphasizing the need for adaptive strategies to address evolving market conditions in the weeks ahead.

ChemAnalyst predicts a potential rise in ECH prices in the coming weeks, attributed to anticipated increases in feedstock Propylene prices in the global market. The recent drop in upstream Crude Oil prices, influenced by the delayed OPEC+ meeting and a substantial 9-million-barrel increase in U.S. crude inventories, adds complexity to market dynamics. Despite expectations of OPEC+ production cuts, the International Energy Agency signals a slight supply surplus in 2024.

Related News

US Showcases Stability in Epichlorohydrin Market Against High Freight Charges
  • 27-May-2024 7:08 PM
  • Journalist: S. Jayavikraman
Epichlorohydrin German Market Faces Downturn During March Amidst Slowdown in Construction Activity
  • 11-Apr-2024 2:15 PM
  • Journalist: Nina Jiang
Tight Spot Flow and Cost Pressure Surges Chinese Epichlorohydrin Market
  • 15-Feb-2024 2:54 PM
  • Journalist: Patrick Knight
Fire at Qilu Petrochemical Adds Fuel to China's Epichlorohydrin Price Rally During December 2023
  • 11-Jan-2024 2:20 PM
  • Journalist: Kim Chul Son