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US Showcases Stability in Epichlorohydrin Market Against High Freight Charges
US Showcases Stability in Epichlorohydrin Market Against High Freight Charges

US Showcases Stability in Epichlorohydrin Market Against High Freight Charges

  • 27-May-2024 7:08 PM
  • Journalist: S. Jayavikraman

The US market for Epichlorohydrin experienced a period of remarkable stability during the fourth week of May 2024. Despite the freight charges inched higher from China to the USA, the prices for Epichlorohydrin remained moderately stable due to muted demand from the downstream paints and coating industry. This stability was coming against the backdrop of the dull performance of the construction industry, a key application for Epichlorohydrin.

Despite the typical surge in activity during the approaching summer season, high interest rates have significantly dampened new orders for Epichlorohydrin. Wary of rising borrowing costs and project viability, construction companies were delaying or cancelling plans altogether. This translated to a decline in Epichlorohydrin demand, limiting orders and preventing price hikes. Adding to the demand side dynamics, downstream Epichlorohydrin consumers were primarily focused on depleting existing stockpiles rather than placing new orders which attributed to a cautious market characterized by small purchases and a weak overall buying atmosphere. New order transactions remained flat, and the Epichlorohydrin market was under pressure. Henceforth, both producers and consumers adopted a cautious approach before resuming larger purchases. The Construction Chemicals company recorded lower net sales quarterly than it did the year before, mostly due to regional pricing decreases that were somewhat countered by volume growth in all geographic regions. Net sales were flat sequentially, with lower volumes in Asia Pacific offsetting price and volume increases in the US, Canada, and EMEAI.

However, a bullish trend emerged in freight costs due to port congestion that caused delays in Epichlorohydrin shipments from Asia to America. Rates for freight heading to the East and West Coast of America were assessed higher as the majority of North American market players stated that they had not faced difficulties due to a shortage of equipment, traffic in the days before Labor Day has made space constraints worse. This congestion stemmed from an excess of cargo at Asian ports, leading to a supply restriction problem and ultimately, lower inventory levels at US ports. However, despite the high freight charges, the final price of Epichlorohydrin in the US remained stable to settle at 2167 USD/MT ECH CFR, New Jersey during the fourth week of May 2024. The low demand from the construction industry effectively counterbalanced the upward pressure exerted by increased shipping costs. As per ChemAnalyst, the prices of Epichlorohydrin are expected to showcase a bullish price trajectory amidst, limited supplies of the finished goods are anticipated, prompting the manufacturers for price adjustments.

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