Oversupply Situation for Epoxy Resin Compelling Key Players to Halt Their Productions

On March 21, 2023, Olin Corporation announced that it had decided to stop producing solid Epoxy Resin at its Gumi, South Korea, and Guaruja, Brazil, facilities, as well as its Cumene facility in Terneuzen, Netherlands. It is anticipated that Olin's first-quarter 2023 results will include restructuring charges totaling approximately $57 million for these plans, of which approximately $15 million will be for non-cash asset impairment charges. It is anticipated that these charges' cash component will be paid for within the next three years.

According to Scott Sutton, Chairman, President, and Chief Executive Officer, "This is another step to right-size our global Epoxy asset footprint to the most cost-effective asset base to support our strategic operating model. Our Epoxy business continues to experience excessive supply and weak global demand. Our determination to increase our Epoxy business's earnings to a level that is more sustainable is bolstered by this action. In order to achieve reinvestment economics across our Epoxy portfolio, we will continue to evaluate and carry out additional actions that right-size the business."

Epoxy Resin's overall market sentiments in Asia and Europe appeared to have remained consistent over the past three months (December 2022 to February 2023) and continue to follow a similar path.

The market for Epoxy Resin products in Asia was impacted by a number of factors. Epoxy Resin has been found to be of modest interest in the electronics, coatings, and adhesives industries, which use it for a variety of production purposes. A decrease in transportation costs also affected the cost of Epoxy Resin. In addition, the subpar performance of the upstream crude oil market had a negative impact on the price of Epoxy Resin in China, as had price reductions in Epichlorohydrin and Bisphenol-A.

However, ChemAnalyst anticipates a shift in the Epoxy Resin market in the region over the coming months. It anticipates growth in base materials and shipping costs over the next couple of months, and downstream businesses to place additional procurement orders for this product to manufacture end-products, and the market will expand by almost 3% by May 2023.

Similar to Asian markets, the market for Epoxy Resin in Europe was impacted by lower prices for the base compounds used in its production and a moderate demand from downstream businesses for the material. Similar to how it did in Asia, the markets developed similarly. The firm expects the market of Epoxy Resin in Europe to increase by 3.42% by May 2023, as it anticipates the prices of base materials and shipping to increase, as well as the demand for this commodity to enhance from downstream companies.