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.
For the Quarter Ending December 2023
North America
The North American Epichlorohydrin (ECH) market displayed a notable downtrend during the fourth quarter of 2023 when compared to the previous one. However, October remained majorly silent due to the maintenance shutdown of the Westlake Epoxy in Deer Park, Texas a major manufacturer of ECH with a capacity of 135,000 mt/year on 24 September 2023 as the supply-side capacity utilization rate reached only half of the total capacity, indicating underutilization.
Conversely, November witnessed a clear downtrend despite certain companies hesitating to scale back production, the imminent introduction of new production capacity limited support on the supply side. The sluggish performance of the downstream epoxy resin market, largely dependent on a depleting inventory of raw materials, contributed to a cautious approach in ECH inquiries driven by rigid demand considerations.
The US ECH market witnessed a significant price decrease of around 15% from the previous quarter of 2023, primarily affected by cheaper imports of products from overseas markets. The price also saw a decline of 41% from the same quarter of the previous year. The latest price of ECH CFR New Jersey in the USA in December was USD 1854/MT.
APAC
Epichlorohydrin prices in the APAC region during the fourth quarter of 2023 witnessed a complete rebound compared to the third quarter. This upward trend can be attributed to a notable increase in the cost of feedstock Glycerine, which experienced a rise in the Asian market during October.
Another major factor was the overall bullish market sentiment during November, as demand for Epichlorohydrin has risen due to the expected improvement in economic activities across the region. Concurrently, the domestic supply of the product struggled to keep pace with the heightened overseas demand, leading to insufficient inventories and creating a tight supply scenario.
In South Korea, which experienced the highest price changes in the region, Epichlorohydrin prices were influenced by a low supply. This scarcity of supply, coupled with the overall bullish market sentiment, contributed to an increase in prices. Additionally, the trend, seasonality, and correlation analysis for the country in the fourth quarter of 2023 showed a positive price percentage change. The latest price of Epichlorohydrin FOB Busan in South Korea for December was USD 1171/MT.
Europe
The fourth quarter of 2023 proved to be challenging for the Epichlorohydrin (ECH) market in Europe. The market experienced a bearish trend, primarily due to weak demand from the construction industry, which was impacted by high-interest rates and rising building costs.
This led to a decline in both input costs and output charges. The supply of ECH remained moderate throughout the quarter, with available raw materials contributing to high supply chain pressures. However, the demand remained low due to low purchasing activities and delayed investments, reflecting an uncertain and cautious environment.
The Netherlands, being a key player in the European market, saw a decline in ECH prices. The country experienced a decrease in demand from the downstream construction industry and faced challenges such as cheaper imports and low demand from the epoxy resin industry as the Euro to the United States Dollar appreciated during December with a monthly increase of 1.50%. Henceforth, the imported material acquired by the Netherlands remained at a cheaper rate compared to the previous month. The latest price for Epichlorohydrin CFR Rotterdam in the Netherlands was USD 2644/MT in December.
South America
Epichlorohydrin pricing in the South American region during the fourth quarter of 2023 remained bearish when compared with the previous one. This decline was maintained by the steady import of products from overseas, particularly from Asia, which is a major supplier to the region.
However, the demand from the construction industry, a major consumer of Epichlorohydrin, was affected by the onset of the winter season during November. Another contributing factor to the price decline was the lowered cost of feedstock, particularly Propylene, playing a pivotal role in reducing the overall production cost of ECH.
Brazil heavily relies on imports from Asia, making this price decrease a significant factor in the local market. Additionally, the decreased cost of feedstock, particularly Propylene, contributed to the overall price trend. Despite an increase in input costs, the rate of inflation remained relatively low, providing some stability to the market. The latest price of Epichlorohydrin CFR Santos in Brazil for December was USD 2284/MT. Slow market offtakes and adequate inventory level declined the price trend this quarter with limited market purchases from the downstream enterprises,
For the Quarter Ending September 2023
North America
In the third quarter of October 2023, the North American Epichlorohydrin (ECH) market witnessed a mixed trend. In the United States, the price of ECH initially dropped by approximately 8% in the first months of the quarter. The main reason behind this decrease was the availability of cheaper imported products from overseas in the country. The global market also saw a decrease in the price of the product, which further influenced the downward price trend for ECH. Moreover, the demand for ECH from the downstream epoxy resin market was low, contributing to a bearish trend in the market. However, the price of ECH increased in the last two months of this quarter largely attributed to improved demand for products within the downstream Epoxy Resin market. This surge in demand created a positive ripple effect on Epichlorohydrin pricing as it is a key ingredient in epoxy resin production. Simultaneously, global market dynamics played a role in influencing prices, with products worldwide seeing an increase. One notable impact of this global trend was observed in the import of Epichlorohydrin products into the USA. As prices rose internationally, it impacted the cost of importing these products into the country, contributing to the price increase in the US market. This interconnectedness of global markets underscores the importance of monitoring international trends in chemical pricing. In the Chinese market, Epichlorohydrin prices also saw an upward trajectory, with an approximate 2% increase. This rise was primarily due to insufficient supply, highlighting the delicate balance between supply and demand that dictates pricing dynamics within the chemical industry.
APAC
Throughout the third quarter of October 2023, the APAC region witnessed a mixed trend in the Epichlorohydrin (ECH) market. The Chinese market, in particular, experienced a significant price decline of approximately 8% during the first month of the quarter, primarily attributed to the adverse impact of typhoon weather and heavy rainfall. Construction conditions in South and East China were unfavourable, leading to sluggish market demand and increased inventory pressure on manufacturers. This resulted in an overall weakened market scenario. The downstream construction industry bore the brunt of extreme weather conditions, with construction sites in South and East China suffering from unfavourable conditions. The imbalance between supply and demand in the ECH market further exacerbated the situation, forcing manufacturers to adopt price reduction and promotional strategies in an effort to stimulate sales. However, the price of ECH increased by around 2.8% and 0.3% in the last two months of this quarter as the price of feedstock glycerine while there was an upward trend in the cost of raw material propylene, which exerted notable cost pressure on producers. Interestingly, several enterprises managed to maintain comfortable inventory levels, which reduced the urgency to sell goods at lower prices. Consequently, the selling mentality within these enterprises remained relatively firm. Nonetheless, the overall market sentiment was cautious, with most downstream players adopting a wait-and-see approach due to anticipated increases in supply.
Europe
During the third quarter of 2023, the European Epichlorohydrin (ECH) market witnessed a bearish trend. In Germany, ECH prices saw a notable 5% decline during the third quarter of 2023 largely attributed to a pronounced decline in demand from the construction industry. This decline was primarily attributed to the impact of high interest rates and soaring building costs, which have significantly dampened the enthusiasm for new construction projects across Europe. Despite these challenges, the construction sector has managed to maintain stability due to the continuation of ongoing projects and an increased emphasis on sustainability. However, the economic uncertainty has cast a shadow of doubt on some previously secure orders. Furthermore, the rising costs of materials have added to the woes of businesses in the building industry, leading to consistently lower profit margins than initially anticipated. These economic conditions have created a less favourable environment for potential buyers and investors, leading to a subdued appetite for our product. Consequently, this weaker demand has exerted downward pressure on prices, contributing to a bearish trend in the market.
For the Quarter Ending June 2023
North America
The Epichlorohydrin (ECH) market in the United States observed a decrease in its prices during the second quarter of 2023. This decline was mainly attributed to the reduced feedstock Propylene cost and increased production of raw glycerine. During this period, the price of feedstock Propylene decreased by around 18.5%, 12.8%, and 8.5%, respectively. As a result, the price of ECH decreased by approximately 5.5%, 1%, and 3.5% in April, May, and June, respectively. Furthermore, the lower consumption of products in downstream epoxy resin, paints and coatings, automotive, and building and construction sectors drove the market during this period. Moreover, the product supply in the country was high, and no shortage of material was noticed during this quarter. Moreover, the labor shortage in the USA and the US bank crises after the failure of Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) disrupted the availability of financing and lending options for construction projects. Construction companies often rely on banks and financial institutions to secure loans and credit lines to fund their projects. SVB's failure led to a reduction in available credit or tighter lending standards. The construction industry faced challenges in securing the necessary capital for their projects, potentially leading to delays or cancellations of the demand for construction products. The decrease in demand for construction products directly impacted Epichlorohydrin prices.
APAC
In the second quarter of 2023, the Asian market experienced a decrease in Epichlorohydrin (ECH) price. In China, the prices of ECH increased by around 0.5% in April 2023. However, in May and June 2023, the product's price decreased by approximately 4%, and 9.5% also declined. The major reason behind this price trend was the lower cost of feedstock Propylene, as it declined nearly 3.1% and 7.8% in May and June 2023, respectively. With decreases of around 8% and 8.7% in May and June, respectively. The end-use construction industry was trying to get revived during this quarter but did not perform well due to sluggish overseas demand from USA and Europe. In India, the Price of ECH increased by around 1.2% in the first month of this quarter as the demand for the product from the downstream Epoxy Resin market increased, whereas the supply was moderate. In May and June 2023, the price of products decreased by around 1% and 4%, respectively, primarily due to declined value of feedstock Propylene as it decreased by approximately 3% and 8%, respectively, during these two months. In the last month of this quarter, the price of Epichlorohydrin CFR JNPT (India) was hovering around USD 928.98/MT.
Europe
In the second quarter of 2023, the European Epichlorohydrin market experienced a bearish market trend in the first month of this quarter as feedstock Propylene prices declined by around 5.5%. Furthermore, macroeconomic factors such as high inflation negatively affected consumer spending, further contributing to the bearish sentiment in the market. The buying momentum from derivative sectors, particularly constructions, and consumer goods, has significantly weakened as many buyers prioritize maintaining minimal inventories and acquiring materials only when necessary. The strike by dock workers at the Port of Hamburg, Germany, is the nation's busiest and the second busiest in Europe. This strike impacted the export of Epichlorohydrin and further helped to decline the product's price in the country. However, in the last two months of this quarter, the market situation was bullish prices increased by 1% and 3.8%, respectively, due to increased demand for products from overseas as the USA fulfilled most of the Epichlorohydrin demand from Europe. However, the supply was limited in the region.
For the Quarter Ending March 2023
North America
The price of Epichlorohydrin has decreased over the quarter ending March 2023 due to factors such as enhanced imports from Europe, decreased demand from downstream paint and cosmetic companies, and a reduction in freight charges. This price reduction was also supported by the lowered cost of propylene, the base material used in the production of Epichlorohydrin. As a result, the commodity was being traded at USD 2516 per MT on a CFR - New Jersey basis in March 2023. However, at the start of the year, the price of Epichlorohydrin remained unchanged due to a consistent demand-to-supply ratio. The US dollar has appreciated against the Euro by about 0.20% between January 30th and February 3rd, 2023, and this currency fluctuation had an impact on the epichlorohydrin market this quarter.
APAC
In the first quarter of 2023, the cost of Epichlorohydrin decreased in the APAC region. The lower price was a result of reduced propylene costs, which is the base material for making Epichlorohydrin, and moderate demand from downstream textile and cosmetics businesses. As a result, Epichlorohydrin was traded at USD 1406 per MT on a FOB - Ningbo basis. The quarterly market situation for Epichlorohydrin was bearish, with modest growth in international demand amidst economic slowdown across the globe. Stock volumes of the commodity were over-supplied amidst consistent production rates. Moreover, the price reduction of Epichlorohydrin in the mid-quarter resulted from the lower upstream crude oil prices and muted demand from downstream businesses.
Europe
The price of Epichlorohydrin has experienced stability in the quarter ending March 2023, traded at USD 2,970 per MT on FOB – Hamburg basis in March 2023. The price stagnancy was attributed to stable propylene prices and consistent demand from downstream companies, with no significant disruptions to supplies. At the start of the year, the demand-to-supply ratio remained stable and led to only a marginal price increase in January. The bearish market situation was characterized by moderate supply and moderate demand in this quarter of 2023. The product moderately appealed to cosmetics and textile manufacturing companies, and despite the recent price concessions, purchasing activity has not shown significant changes in the first quarter in the European market.
For the Quarter Ending December 2022
North America
The Epichlorohydrin market in North America also experienced further expansion this quarter, as did the markets in Europe. Participants in the market said that downstream producers of textiles and cosmetics showed average interest in this commodity for their production needs. Additionally, epoxy resin manufacturers' demand for this product decreased. The commodity's limited availability in warehouses and inventories as a result of lowered imports from European nations and upstream companies' moderate production activities because of average downstream demand, however, was driving the market upward.
APAC
During this quarter, Epichlorohydrin's Asian markets also continued to decline. In India, as there were sufficient quantities of this commodity in inventories without being sold, suppliers were left with no choice but to announce offers to increase their sales because textile and cosmetics production companies showed only a passing interest in it. When it comes to China, this product's market declined as a result of lower demand from downstream businesses, who were forced to reduce production rates as a result of the re-implementation of Covid - 19 curbs. Due to the same circumstance, upstream businesses were also required to restrict their production activities.
Europe
This quarter saw further expansion in the Epichlorohydrin market in Europe. According to market participants, consumers' concerns about rising energy and natural gas prices as a result of the ongoing conflict between Russia and Ukraine were affecting the demand. Hence, this product was experiencing diminished demand from downstream epoxy resin manufacturers. In Germany, the Epichlorohydrin market expanded due to the limited availability of this commodity in warehouses and inventories as a result of upstream companies' moderate production activities. Exports, too, got hampered because of the same factor.
For the Quarter Ending September 2022
North America
Epichlorohydrin markets in North America were also down in the third quarter of 2022. Lowered propylene prices had a huge impact on the cost of this product. In addition to this, textile and cosmetics production firms also showed average interest for this product for their manufacturing purposes. Apart from these, firms involved in epoxy resin production also came up with nominal demand for this product. In the U.S., apart from these factors, this product was being bartered at reduced costs because of declined import costs, which was attributed by the strengthening of the U.S. dollar against Euro. Hence, Epichlorohydrin ended its market in the U.S. at USD 2,910 per MT on CFR – JNPT basis.
APAC
The Asian markets of Epichlorohydrin witnessed a steep fall in the third quarter of 2022. The reduction in price on the whole of the Asia Pacific region was primarily because of lowered propylene costs, the base material used in the production of this product. In India, textile and cosmetics production companies showed modest interest in this product, and suppliers had no choice but to announce offers to increase their sales. When it comes to China, the market of this product came down due to the lowered production activity, both in upstream as well as downstream companies, which was due to the instability in power supply, and this product closed this quarter at USD 1,720 per MT on a FOB Ningbo basis.
Europe
The market of Epichlorohydrin witnessed a downfall in the first two months of the third quarter of 2022; however, it bounced back because of the enhanced demand for this product from downstream companies. Participants in the market said that petrochemical demand was being affected by consumer concerns about inflation, the ongoing conflict between Russia and Ukraine, and an approaching energy crisis. In Germany, the Epichlorohydrin market was down till the fourth week of August but got revived in the next week because of expanded export orders for this product, and increased demand for this product from epoxy resin manufacturing companies also played a role in developing the price of this product. Epichlorohydrin closed its market this quarter in Germany at USD 2,750 per MT on a FOB Hamburg basis.
For the Quarter Ending June 2022
North America
In the North American region, the price movement of Epichlorohydrin remained shifting, and product prices oscillated marginally during Q2. However, the overall costs rose by 16% from the previous quarter. The feedstock Propylene and Chlorine prices fluctuated in the region, which impacted the production costs of ECH. Energy and fuel costs also rose during the quarter, which induced cost pressure. The demand from downstream epoxy resin manufacturers remained firm from paint industries for construction and automotive, which grew significantly towards the end of the quarter, and overall product costs rose. The product offtakes remained consistent in the region's domestic market.
Asia
The price trend of Epichlorohydrin fluctuated during Q2 of 2022 in the Asian region, and the product's prices rose by almost 10% from the previous quarter. For the first two months, the product's prices plunged steeply during the mid-quarter due to the region's strong demand from the downstream Epoxy resin producers after the lockdown in China. However, at the end of the quarter, product prices dropped marginally, and production rates curtailed as the orders decreased from the downstream resin industries and product stock was sufficiently available, more significantly after the reopening of Shanghai port in China after three-month hiatus. The product's offtakes were seen moderate in the market during the quarter.
Europe
The European market witnessed a strong price trend for Epichlorohydrin in Quarter 2 of 2022, and the product's costs rose significantly by 18% from the previous quarter. In the H1 of the Q2, the feedstock Propylene prices plunged appreciably after inflation, and product production costs inclined upward steeply. From the mid-quarter feedstocks, costs stabilized and started decreasing. However, fuel and energy costs rose in the country due to the gas shortages, inducing cost pressure. Due to which product's prices rose slightly till the end of the quarter. The demand from the region's epoxy resin producers remained firm. At the same time, the product supplies were affected due to container shortages at the European port. During the quarter the product offtakes remained consistent in the market.
For the Quarter Ending March 2022
North America
In North America, the prices of Epichlorohydrin (ECH) were observed to be increasing in the USA during Q1 2022. So, the prices went up to 9.4% during the middle of the quarter, with prices hovering around USD 3126/ton-USD 3361/ton CFR New Jersey with a surge of 19.3% in the first quarter analogizing to the previous quarter. Due to the firm upstream Crude Oil futures, prices of all the value chain products, including propylene, have soared, triggering the ECH cost in the first quarter. Moreover, freight charges have witnessed an increase of 10% since the start of the month, which has triggered the price increase.
Asia Pacific
During the first quarter of 2022, the prices of Epichlorohydrin (ECH) fluctuated in India, where a decline of 4.2% was seen in the middle of the quarter. The prices were ranging around USD 2875/ton FOB Ningbo in the first quarter of 2022. Market sentiments have improved in this quarter with the increase in the buying momentum and fluctuating demand from the downstream. The price fluctuation in Epichlorohydrin has also affected the downstream Epoxy Resin prices in Asia. As Epichlorohydrin is majorly imported from China and Thailand, its values in India witnessed a significant surge in line with the rise in import prices. A trader revealed that although the offtakes of the product have remained stable in the domestic market, the international prices pressure has shown a significant impact on the pricing fundamentals of the product.
Europe
Europe observed a surge in the prices due to increasing demand from downstream coatings, adhesives, plastics, textile, paper, and inks, with prices rising to 19.3% in Q1 2022. The price was USD 2955/ton FOB Hamburg at the beginning of the quarter, with a rise in upstream propylene and hypochlorous acid in Europe Cost pressure from upstream Natural gas could further push the price due to ongoing war between Russia and Ukraine.The primary cause behind this uproar in pricing has been unplanned outages that resulted in reduced production and high levels of demand in the ethylene market as downstream polyethylene intake are going strong.
For the Quarter Ending December 2021
North America
US Epichlorohydrin (ECH) market had been struggling to gain momentum since late July as do most of the downstream value chain. Demand had further deteriorated during Q4 from the Q3 levels. Upstream propylene prices too have recorded lower average prices during Q4 of FY21. Downstream epoxy resin contracts for December were heard to be lower than the November prices. Spot offers for ECH around Texas were heard to be as low as USD 2750/MT. Production hassles faced during the winter and hurricane seasons had slowly subsided by November of FY22. Imports from East Asia were hard to come by owing to exorbitant freight charges during the months of November and December.
The outlook for Q1 of FY22 remains bullish as upstream propane and in turn propylene prices are expected to put an upward pressure on the prices of ECH. The winter demand for LPG is going to be the key driver for rise in prices of upstream propylene.
Asia
Chinese ECH market saw a continuous drop in prices week on week since the second week of November. The upstream propylene market made some marginal gains during the first week of December but was not enough to impact the prices of ECH as downstream Epoxy Resin demand was unable to make any improvement. The domestic prices fell by over 20% from the first week of November to the closing weeks of December. The spot price of ECH as of the last week of December was assessed at USD 2520/MT.
The Indian ECH market had seen a similar trend with Q4 prices reducing by 7% to 8% compared to the Q3 prices as assessed on spot offers at Mumbai depot. Upstream propylene offers too had reduced by volume by the first week of December. Downstream epoxy contracts for the month of December were being offered at anywhere between 6%-7% lower as compared to the November contracts. On the production front, Meghmani Finechem Ltd. Is set to become India’s largest Epichlorohydrin manufacturer with a 50 KTPA plant about to start operations with full capacity by Q2 of FY22 in an otherwise completely import dominant Indian market with a consumption of around 60 KTPA.
The outlook for Q1 of FY22 remain positive with spot offers picking up momentum by the first week of January itself in China where spot offers at Huangshan were assessed 2.5% to 3% higher than the last week of December prices.
Europe
Exports of Epichlorohydrin to North America from Germany and Netherlands had reduced in volume by the middle of October and consequently the deflated demand led to a series of price revisions in the domestic markets with spot offers seeing a 150 Euro/MT decline from the first week of November to mid-December. The January contracts offered by major manufacturers were on an average, 60 to 70 Euros/MT higher than the December contracts. Downstream epoxy resin demand remained sluggish for more than a month before the start of holidays.
Outlook for Q1 of FY22 remains positive with prices expected to improve by the mid-January period. Upstream propylene prices will in probability increase as, LPG demand during the peak winter season leads to an increase in feedstock propane prices. Also, the demand from downstream epoxy resin demand is expected to be higher in Q1 of FY22 compared to the last quarter.
For the Quarter Ending September 2021
North America
The prices of Epichlorohydrin (ECH) soared in the North American region on the back of the consistent demand from the downstream manufacturers in Q3 of 2021. Hurricane Ida struck USA Gulf Coast in late August which took down nearly 40% of the US’ caustic-chlorine capacity affected the downstream chlor-alkali chain, further driving the ECH prices higher during the quarter. Additionally, rising crude oil prices further impacted the Epichlorohydrin pricing in the region.
Asia
The overall market outlook of Epichlorohydrin showed progress as ECH prices registered a marginal increment in the Asia Pacific during third quarter of 2021. As Epichlorohydrin is largely imported from China and Thailand, its values in India witnessed a significant surge in line with the rise in import prices in Q3 2021. A trader revealed that although the offtakes of the product have remained stable in the regional market, the international price pressure has shown a significant impact upon the pricing fundamentals of the product. Besides, increment in demand for the downstream epoxy resins amidst the ease in lockdown restrictions has also provided an edge to its market fundamentals during the quarter. Towards the end of Q3, the Chinese ECH domestic and the spot market transactions were somewhat weak. Offered quotations Epichlorohydrin in China dropped, and FOB Ningbo discussions were assessed at USD 2400 per tonne, in the last week of September.
Europe
During the third quarter of 2021, the prices of ECH observed a significant rise in the European region followed by the firm demand from the downstream paint and coatings industry. Demand for epoxy resin grew considerably during the quarter which has led to an increment in the pricing of ECH across Europe. In addition, high freight cost also strengthened the overall pricing across the region, suppliers struggled to secure the material as imports weakened due to soaring shipping charges and limited availability of containers.
For the Quarter Ending June 2021
North America
Epichlorohydrin (ECH) prices kept on increasing throughout the quarter, backed by firm demand from the downstream sectors and tight raw material supplies. Demand for Epichlorohydrin remained firm from the downstream Epoxy resin market, while the supply remained tight due to low inventory levels as an effect of curtailed production during the last quarter. In addition, global shipping activities was also running on delays, due to clogged trade routes which also lead to steep rise in export offers for June. Moreover, firming crude oil values also impacted the prices of Epichlorohydrin (ECH) in the country.
Asia
Epichlorohydrin market demonstrated firm sentiments in Q2 in APAC region, backed by firm demand from the downstream sectors. Trade activities for Epichlorohydrin in Asia remained high during this quarter, as the demand from downstream Epoxy resin manufacturers was high in China while modest in India. Meanwhile, due to modest demand from the end user segment of Epoxy resin, manufacturers in India procured a fair number of cargoes from Thailand followed by China, Saudi Arab and Taiwan during the month of June. Procurement by the Indian traders were muted in May and suddenly increased in the month of June, the total ECH volumes procured during the month of June was estimated around 5900 MT in India.
Europe
The European market witnessed a steady rise in the price of Epichlorohydrin during this quarter, backed by global material shortage amid improved demand in tandem with economic rebound. The Epoxy resin market was heard improving month over month during Q2 2021 compared to Q1 2021. Therefore, the demand for Epichlorohydrin increased from this segment and led to a steep rise in its prices across Europe. In addition, soaring freight cost also strengthened the overall price scenario across the region and tightened the import supplies.
For the Quarter Ending March 2021
North America
During Q1 2021, acute shortage of ECH could be observed in North America and the prices showed an abrupt spike. After devastating winter storm across the USA gulf coast, all the plants located in the proximity of storm had to shut down during mid-February, which reduced the total output of Epichlorohydrin by more than 50%. Availability of feedstock Propylene which is highly concentrated around the gulf of USA reduced after this rare climate calamity. Due to notable supply crunch, prices of ECH rose sharply from USD 2095/MT levels observed in January to USD 2395/MT in March.
Asia
The Asian market witnessed stable demand for ECH from the downstream sectors amidst fall in supply of the feedstock Propylene, which was critically short in the global market and high in demand. Prices of ECH in the Indian and Chinese market observed significant rises every week and reached USD 2165/MT in China during February and USD 1894.3/MT in India during March 2021. In addition, sentiments in the Indian markets were bolstered after DCM Shriram announced an investment of around USD 137 million to expand its business, in which construction of a new plant of ECH with annual capacity of 51,000 Tonnes was also included.
Europe
Due to huge spike in prices of feedstock chemicals, price of ECH rose effectively Q-o-Q. Unfavourable weather conditions across some countries disrupted the supply chain activity causing the manufacturers to announce force majeures on their plants due to low availability of the feedstock chemicals like Propylene. One major producer from Germany mentioned that, due to high container prices, exports of ECH from Germany to Asia was getting too expensive.
For the Quarter Ending September 2020
North America
ECH supply-demand gap stood balanced in Q3 because of the resumption in operations at the manufacturing unit of a leading producer who remained shut during Q2. Sentiments were hard hit after the sole ECH producer announced to shut down a Novalac plant in North America, which wasn't much productive. Meanwhile, demand started losing grounds post a much-needed recovery observed across the automotive and construction sectors. Firming Propylene lent support to the pricing curve which started regaining the uptrend. Amid suppressed dynamics, players maintained a cautious stance to monitor the global economic developments, especially in China, to see if it translates into more positive sentiments and redirect the trade flows.
Asia
ECH supply remained restricted with offers registering marked gains across Asia triggered by scheduled turnarounds and unplanned outages which kept the spot availabilities low between July-August. A Chinese ECH plant curtailed operating rates in August due to issues pertaining to upstream units. Moreover, ECH supplies from the 130 KTPA Jiangsu Haixing plant were taken offline in the early August due to technical issues. Demand was healthy in China, buoyed by ramped run rates at the downstream plants as several epoxy makers rushed to procure volumes before the extended National Day holidays begin in October. CFR China prices for ECH were heard around USD 1200-1250 per MT in August, amid anticipations that supply may further tighten in Q4. Offtakes by some Northeast Asian countries were capped due to lackluster downstream buying.
Europe
The European ECH market turned quite balanced moving into Q3 as the supply-demand scenario was seen pushing back towards demand because only limited supply additions were foreseen on the horizon. Demand for Epoxy Resins was seen gradually recovering from the Q2 coronavirus impact causing players to report lifted margins. Players were able to materialize price increases as inventories in the European markets were replenished with higher cost stock. The downstream inquiries and purchases were seen showing greater activity over Q2 amid fears that some uncertainty is likely to persist even in Q4.
