Introduction: Recently, the domestic epichlorohydrin market emerged from its earlier consolidation phase, with prices edging narrowly upward and showing a staged rebound. This round of movement was mainly driven by a temporary tightening in supply and the release of rigid downstream demand. Trading sentiment improved, and producers and traders became more willing to support prices. As of September 3, the weekly average spot price in the Jiangsu market was around 11,290 yuan/mt, up 180 yuan/mt from the previous week, an increase of about 1.62%.
At the beginning of this week, downstream demand was weak, and producers sold at concessions, with prices in Shandong seeing relatively obvious declines. On September 1, following the shutdown of Shandong Minji's plant, traders faced difficulties in delivering contracted volumes. Market inquiries increased, trading sentiment warmed, and companies were unwilling to sell at low prices, prompting successive upward price adjustments. Meanwhile, rising raw material glycerol prices strengthened cost support. Combined with ample spot supply and released downstream restocking for rigid demand, producers actively advanced price hikes, the negotiation center moved up, and the overall market ran firm.
In terms of domestic supply, the average capacity utilization rate of the domestic epichlorohydrin industry this week was 45.89%, down 3.2 percentage points from last week. In terms of output, over the week from August 28 to September 3, domestic epichlorohydrin production was 26,800 tonnes, a decrease of 6.62% from the previous week. During the period, Zibo Feiyuan's 100,000-tonne/year glycerol-process plant remained shut down; units at Binhua Group, Shandong Minji, and Hubei Minteng were also under maintenance shutdown. In addition, some individual units in Shandong were running at reduced loads, while other units saw no significant adjustments. Overall, epichlorohydrin supply contracted compared with last week. Meanwhile, producers mainly focused on delivering earlier orders, spot circulation was tight, and market supply maintained a tight balance.
Domestic epichlorohydrin supply-demand balance (10,000 tonnes)
| Data Type | Item | Current Period | Previous Period | Change |
|---|---|---|---|---|
| Supply | Epichlorohydrin output | 2.68 | 2.87 | -0.19 |
| Demand | Domestic consumption | 2.03 | 2.09 | -0.06 |
In the current period, the domestic epichlorohydrin supply-demand landscape contracted. On the supply side, due to maintenance and load reductions at some units, weekly average output was 26,800 tonnes, down 6.62% period-on-period. Spot volumes in the market contracted in tandem, and suppliers' price-supporting sentiment strengthened. From the demand side, the key downstream epoxy resin sector operated at a low capacity utilization rate, slowing the pace of rigid-demand procurement of epichlorohydrin. Total consumption during the period decreased by 2.78% period-on-period, providing relatively limited demand support. Although both supply and demand contracted, the degree of supply contraction was significantly larger than that of demand contraction, causing the supply-demand gap to narrow further from last week and easing the overall supply-demand contradiction.
During the period, production profits across the epichlorohydrin chain varied by process. Profits for the main raw materials—propylene and glycerol—both trended upward. The average weekly gross profit for propylene in Shandong rose to 716 yuan/mt, up 72.95%; the profit for 99.5% glycerol in East China rose to 318 yuan/mt, up 8.9%. Looking at the different epichlorohydrin processes, the average weekly profit for propylene-process epichlorohydrin fell to 2,028 yuan/mt, down 0.93%. The loss for the glycerol-process route narrowed slightly, with weekly profit improving to -850 yuan/mt, up 11.92%. The average weekly profit for the major downstream product epoxy resin E-51 declined to -397 yuan/mt, down 28.48%. Overall downstream profitability remained weak, suppressing enterprises' willingness to actively restock more expensive raw materials.
Costs: Prices of the main feedstock glycerol are expected to edge up, providing support at the cost floor and underpinning epichlorohydrin prices.
Supply: Some shut-down units in Shandong will restart successively, and market supply is expected to increase. Combined with export/delivery schedules at some producers, this may exert downward pressure and limit upside room.
Demand: The main downstream epoxy resin sector is mainly executing existing contracts. After the concentrated restocking last week, sentiment toward new orders in the spot market is cautious, providing limited support to the market.
Sentiment: With limited buying interest at high prices, market sentiment support is weak, and producers' intention to sell may increase.
In summary, domestic epichlorohydrin prices are expected to fluctuate within a narrow range in the next period. Moving forward, close attention should be paid to plant operations, downstream procurement pace, and market trading activity.
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