In the first half of 2026, China's epichlorohydrin production increased by 5.4% year-on-year.

Introduction: China's epichlorohydrin capacity continues to expand in 2026. In the first quarter, with the successful commissioning of Inner Mongolia Pangu's 80,000 tons/year epichlorohydrin unit and the restoration of some existing capacity, the total domestic epichlorohydrin capacity reached 2.78 million tons/year. Affected by cost pressures and planned maintenance shutdowns that adjusted operating loads, China's epichlorohydrin production in the first half of 2026 is estimated at 693,100 tons, a year-on-year increase of 5.4%.

(I) China's Epichlorohydrin Capacity Growth of 3.11% in H1 2026

Table 1: Statistics of New Epichlorohydrin Capacity in China, H1 2026 (Unit: 10,000 tons/year)

Source: chempricehub

In the first half of 2026, one new epichlorohydrin unit was commissioned in China: Inner Mongolia Pangu New Materials Co., Ltd.'s 80,000 tons/year glycerol-based epichlorohydrin plant. Additionally, after capacity adjustments at some enterprises, the domestic epichlorohydrin capacity base was raised to 2.78 million tons/year in H1 2026, representing a capacity growth rate of 10.98%.

Table 2: Comparison of Epichlorohydrin Production Changes in China, H1 2026 (Unit: 10,000 tons)

Source: chempricehub

According to data from chempricehub, in the first half of 2026, one new epichlorohydrin capacity unit was added domestically — Inner Mongolia Pangu's 90,000 tons/year glycerol-based epichlorohydrin plant. This unit has achieved normal batch supply, with products gradually entering the market. Regarding operating rates, the capacity utilization rate of domestic epichlorohydrin units remained relatively high in Q1 2026. Entering the second quarter, maintenance shutdowns became more concentrated, particularly in May and June. During this period, multiple mainstream units — including Jiangsu Haixing, Shandong Minji, Hebei Zhuotai, Hebei Jia'ao, Hebei Jinbang, Befar Group, and Zhejiang Zhenyang — were taken offline for maintenance one after another, creating expectations of a supply contraction in the market over the period.

Although maintenance losses increased, supported by the release of new capacity and earlier high-load operations, total domestic epichlorohydrin production in H1 2026 still achieved year-on-year growth, rising 5.4 percentage points compared to the same period last year, with cumulative output reaching 693,100 tons. The supply side continued to show an overall growth trend.

In the first half of 2026, affected by both planned and unplanned shutdowns due to unforeseen factors, monthly maintenance losses in the epichlorohydrin industry increased significantly compared to the same period in 2025, with a year-on-year increase of 8.73%. The average monthly loss remained at 53,200 tons, with June recording the peak at approximately 69,800 tons. During this period, epichlorohydrin units with a combined annual capacity of about 1.048 million tons entered a concentrated maintenance cycle, significantly narrowing market supply. The main reason was the high-cost volatility of raw material glycerol, which hindered the pass-through of epichlorohydrin prices, causing losses on the glycerol-based process route to widen continuously. Under these circumstances, many production enterprises proactively reduced operating loads or took temporary shutdowns to avoid further losses, exacerbating the decline in overall industry operating rates and amplifying production losses.

(II) Domestic Epichlorohydrin Supply Forecast for H2 2026

In the second half of 2026, China's epichlorohydrin capacity base is expected to expand further. Shandong Haili's propylene-based unit and Zhejiang Sanmei Phase I's 50,000 tons/year glycerol-based unit both have trial production plans. By then, total domestic capacity is projected to rise to 2.905 million tons/year. With the gradual commissioning of new capacity and the recovery of operating loads at some previously maintained glycerol-based units, market supply of tradable goods will become more ample. It is estimated that in H2 2026, the monthly average epichlorohydrin production in China will remain around 120,000 tons, with industry capacity utilization fluctuating between 45% and 50%. However, there remains significant uncertainty regarding unit operations. The operational stability of newly commissioned units, as well as temporary shutdowns due to cost pressure or unexpected failures, will periodically affect the pace of market supply. Attention will need to be paid to the operating dynamics of epichlorohydrin units going forward.