【Introduction】 In April, the domestic epichlorohydrin market showed a volatile and weakening trend, ending the month on a weak note. Under the combined influence of multiple bearish factors such as loosening cost support, steady supply growth, and sluggish downstream demand, prices declined with fluctuations. Entering May, raw material price fluctuations narrowed, and the cost side weakened. However, with reduced supply and a slight increase in demand, a narrow adjustment trend is likely in May. Nevertheless, further attention should be paid to changes in costs and supply-demand dynamics, as market uncertainties persist.

1. Cost Side: Raw Material Prices Fell, Weakening Support

Currently, the mainstream processes in the epichlorohydrin industry are the glycerol method and the propylene method. In April, raw material prices for different processes remained firm, providing noticeable cost support. Glycerol method: In April, the monthly average price of 99.5% glycerol in East China was 11,194 yuan/ton, up 4.53% month-on-month. Cost support for the glycerol-based epichlorohydrin process remained. Meanwhile, epichlorohydrin prices first rose and then fell, further widening the loss margin for the glycerol method. As of April 30, the average gross profit for glycerol-based epichlorohydrin was -883 yuan/ton, down 248.15% month-on-month.

In April, the average monthly gross profit for the propylene high-temperature chlorination method for epichlorohydrin showed a declining trend. The monthly average prices of propylene and liquid chlorine rose. The monthly average price of propylene in Shandong was 9,201 yuan/ton, up 11.89% month-on-month; the monthly average price of liquid chlorine was 403 yuan/ton, up 99.5% month-on-month. Production costs increased significantly, and combined with epichlorohydrin prices rising first and then falling, the average monthly profit margin for the propylene high-temperature chlorination method narrowed.

2. Supply Side: Stable Plant Operation, Ample Spot Supply

In April, the operating rate of the domestic epichlorohydrin industry was around 53%, with stable operation of mainstream enterprise units, keeping overall supply pressure unabated. In terms of process route comparison, the divergence between the propylene method and glycerol method production routes continued. For the propylene high-temperature chlorination method, raw material costs increased and profit margins shrank, but overall profits still maintained an advantage, driving enterprises to have sufficient production motivation, with capacity utilization remaining high. The average monthly operating rate reached 98.26%. Although the glycerol method had cost support, profit margins were thin. However, some enterprises held low-cost raw material inventories from earlier periods, leading to a slight recovery in production willingness compared to March. The average capacity utilization rate in April was about 46%, up 1 percentage point from the previous month, but the overall operating level remained low.

3. Demand Side: Weak Downstream Demand, Mainly Restocking on Demand

In April, some epoxy resin plants underwent maintenance shutdowns, and downstream end-use sectors such as coatings, electronics, and wind power saw lackluster demand with insufficient orders, leading to low operating rates for epoxy resin enterprises. In April, epoxy resin industry output and capacity utilization decreased month-on-month. The average capacity utilization rate was 44.93%, down 2.08 percentage points month-on-month and down 8.41 percentage points year-on-year; output was 164,200 tons, down 4.42% month-on-month and down 6.17% year-on-year. The persistently weak demand in the epoxy resin market was the core factor dragging down epichlorohydrin prices.

May Market Outlook: In May, cost-side fluctuations are expected to be limited, supply will decrease, and demand is anticipated to increase. The supply-demand balance will dominate the market, and market prices are likely to undergo narrow adjustments.

Cost Side: Raw materials are expected to weaken with narrow adjustments, providing bottom-line cost support. The main raw material, glycerol, influenced by costs and demand, may fluctuate at low levels. In the short term, cost pressure for glycerol-based epichlorohydrin will be relatively weak, which may limit the upside and downside of epichlorohydrin prices, serving as important support for narrow adjustments.

Supply Side: Capacity utilization rates are expected to decline, leaving overall supply under no pressure. On May 8, Shandong Minji's 100,000-ton/year glycerol-based plant will shut down. Additionally, on May 10, Jiangsu Haili's 130,000-ton/year propylene-based plant is scheduled for maintenance around May 10. This is expected to lower overall epichlorohydrin industry operating rates and supply. Moreover, current production enterprises are mainly fulfilling previous orders, so there is no pressure on overall market supply, forming a positive support for the market.

Demand Side: In May, downstream epoxy resin will gradually enter the traditional off-season. Orders in end-use sectors such as coatings, construction, and electronics are unlikely to grow. Additionally, some epoxy resin units are shut down, resulting in low capacity utilization rates for enterprises. Demand for epichlorohydrin will continue to show a weak trend. The pattern of cautious观望 (wait-and-see) and procurement on demand is unlikely to see a breakthrough.

In summary, the epichlorohydrin market in April ended on a weak note under the triple pressure of cost loosening, ample supply, and weak demand. In May, considering costs, supply-demand dynamics, and market sentiment, the epichlorohydrin market is expected to undergo mainly narrow-range fluctuations and adjustments, with limited room for mainstream price movements.