Growth in epoxy chloropropane prices has stalled and turned into a correction, constrained by weak demand.

Introduction: Since September, the domestic epoxy chloropropane (ECH) market has exhibited a pattern of frequent fluctuations. Early in the month, rising raw material prices across different process routes strengthened cost-side support. Combined with phased concentrated restocking by downstream users, this pushed the center of gravity for ECH prices upward. However, as prices reached relatively high levels, persistent weakness in downstream demand constrained further gains, and the upward momentum was significantly limited. By mid-month, prices gradually entered a correction channel. Downstream inquiries became sparse, willingness to place orders based on rigid demand remained weak, and a phase-wise bearish trend emerged, resulting in an overall cautious trading atmosphere.

I. Supply Expected to Be Loose, Intensifying Competitive Pressure in the ECH Market

Data Source: Chempricehub

During this period, operating rates at some plants in Shandong and Jiangsu increased, while units at Shandong Minji and Hubei Minteng remained shut down. After offsetting bullish and bearish factors, the overall supply of ECH this week increased compared to last week. According to Chempricehub statistics, the average industry capacity utilization rate for domestic ECH was 47.55% this week (revised previous value: 45.94%), up 1.61 percentage points from the prior period. In terms of output, domestic ECH production for the week of September 11–17 was 27,800 tons, a week-over-week increase of 3.73%.

Looking ahead to the next period, there is an expectation for the Shandong Minji unit to restart, though uncertainty remains, requiring continued monitoring. Meanwhile, most units that increased load last week have entered stable operation, suggesting that overall industry supply will fluctuate only slightly. Additionally, with the Mid-Autumn Festival and National Day holidays approaching, anticipated restrictions on road transport are leading producers to prioritize shipping and inventory reduction before the holidays. This will likely result in looser availability of spot resources in the market and further intensify competitive pressure within the industry.

II. Downstream Consumption Growth Falls Short of Expectations, Pressuring the Raw Material Market

Data Source: Chempricehub

Regarding downstream consumption structure, after ECH prices rebounded to 11,500–11,600 yuan/ton in early September, downstream enterprises generally adopted a strategy of small-batch, phased restocking, showing little willingness for bulk inventory buildup. Against the backdrop of high raw material prices, profit margins for producers using various process routes have been continuously squeezed, creating a negative feedback loop where demand exists but incremental growth does not. Although the capacity utilization rate of major downstream epoxy resin producers rose to 50.50% this period, with output increasing to 42,000 tons, and plans exist for the Nantong Xingchen unit to restart next period—suggesting continued supply growth—downstream enterprises are primarily consuming contract allocations and existing inventories. Participation in new purchase orders remains limited, placing clear pressure on the raw material market.

III. Pre-Holiday Stability Likely Amid Narrow Fluctuations

In summary, the cost side maintains a weak, narrow adjustment range; supply increments are relatively limited, but producer inventories remain at manageable levels. Downstream demand is largely reactive, and with mixed bullish and bearish factors, market sentiment shows some divergence. As the holiday approaches, trading activity is becoming more cautious. The overall market is expected to remain stable, though moderate price concessions to facilitate sales cannot be ruled out. If operational adjustments occur at production facilities subsequently, the market may see fluctuating trends, necessitating continued attention to changes in supply-demand dynamics and costs.